• I ' . THE UNITED REPUBLIC OF TANZANIA NATIONAL AUDIT OFFICE REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE AUDIT OF FINANCIAL STATEMENTS OF DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT P 123134 CREDIT IDA No. 5585-TZ FOR THE FINANCIAL YEAR ENDED 30TH JUNE, 2017 Controller and Auditor General, National Audit Office, 16 Samora Machel Avenue, P.O. Box 9080, 11101 Dar es Salaam, Tanzania. Tel: 255 (022) 2115157/8, Fax: 255 (022) 2117527 E-mail: ocag@ nao.go.tz Website: www.nao.go.tz December, 201 7 AR/DMDPNT.56/2016/2017 TABLE OF CONTENTS Page Content Abbreviations ............................. .. .................................... .. ................. iii 1.0 GENERAL INFORMATION ................................................................... 1 1.1. Mandate ..................................................................................... 1 1.2. Vision, Mission and Core Values ........... .... .. ......................................... 1 1.3. Audit Objectives .......................... . ................................................. 2 1.4. Audit Scope ....................................................................... ... . . ..... 2 1. 5. Audit Methodology ......................................................................... 2 2.0 INDEPENDENT REPORT OF THE CONTROLLER AND AUDITOR GENERAL ............. 3 3.0 ANNEXURES .................................................................................. 5 Office of the Controller and Auditor General AR/CG/DMDP/2016/2017 11 Abbreviations LGAs Local Government Authorities PAA Public Audit Act No.11 of 2008 Sect. Section ISA International Standards on Auditing ISSAls International Standards of Supreme Audit Institutions RAP Resettlement Action Plan PAP Project affecting People ESMP Environmental and Social Management Plans CDA Capital Development Authorities DMDP Dar es Salaam Metropolitan Development Project PDQ Project Development Objectives CAG Controller and Auditor General GOT Government of Tanzania IDA International Development Association ISA International Standards on Auditing IPSAS International Public Sector Accounting Standards LGA Local Government Authority PMO-RALG President' s office, Regional Adm i nistration and Local Government URT United Republic of Tanzania Office of the Controller and Auditor General AR/CG/DMDP/2016/2017 m 1.0 GENERAL INFORMATION 1 . 1. Mandate The statutory duties and responsibilities of the Controller and Auditor General are given under Article 143 of the Constitution of the URT of 1977 (revised 2005) and in Sect. 10 (1) of the Public Audit Act No.11 of 2008. 1.2. Vision, Mission and Core Values Vision To be a highly regarded Institution that excels in Public Sector Auditing. Mission To provide high quality audit services that improves public sector performance, accountability and transparency in the management of public resources. Core Values In providing quality services, NAO is guided by the following Core Values: ./ Objectivity: We are an impartial public institution, offering audit services to our clients in unbiased manner . ./ Excellence: We are professionals providing high quality audit services based on standards and best practices . ./ Integrity: We observe and maintain high standards of ethical behavior, rule of law and a strong sense of purpose . ./ People focus: We value , respect and recognize interest of our stakeholders . ./ Innovation: We are a learning and creative public institution that promotes value added ideas within and outside the institution . ./ Results Oriented: We are an organization that focuses on achievement based on performance targets . ./ Team work Spirit: We work together as a team, interact professionally, share knowledge, ideas and experiences . We do this by:- • .Contributing to better stewardship of public funds by ensuring that our clients are accountable for the resources entrusted to them ; • Helping to improve the quality of public services by supporting innovation on the use of public resources; • Providing technical advice to our clients on operational gaps in their operating systems; • Systematically involve our clients in the audit process and audit cycles.; and • Providing audit staff with appropriate training, adequate working tools and facilities that promote their independence. © This audit report is intended to be used by Government Authorities. However, upon receipt of the report by the Speaker and once tabled in Parliament, it becomes a public record and its distribution may not be limited. Office of the Controller and Auditor General AR/CG/DMDP/2016/2017 1 1.3. Audit Objectives To obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error and are prepared in accordance with an applicable financial reporting framework; and whether laws and regulations have been complied with. 1.4. Audit Scope The audit was carried out in accordance with the International Standards of Supreme Audit Institutions (ISSAls) and other audit procedures as were deemed appropriate under the circumstances. This covered the evaluation of the effectiveness of the financial accounting system and internal control over various activities of the DMDP. The audit was conducted on a sample basis; therefore, the findings are confined to the extent that records, documents and information requested for the purpose of the audit were made available to me. Audit findings and recommendations arising from the examination of the accounting records , appraisal of the activities as well as evaluation of the Internal Control System which requires management's attention and actions, are set out in the management letter issued separately to the Accounting officer of PO RALG. As auditor, I am not required to specifically search for fraud and therefore, my audit cannot be relied upon to disclose all such matters. However, my audit was planned in such a way that I would have reasonable expectations of de teeli ng material err urs and misstatement in the Fi nancial Statements resulting from irregularities including fraud. The responsibility for detection, prevention of irregularities and the maintenance of an effective and adequate system of internal control rests with the management of DMDP. 1.5. Audit Methodology My audit approach included tests of the accounting records and other procedures in order to satisfy the audit objectives. My audit procedures included the following: • Planning the audit to identify and assess risks of material misstatement, whether due to fraud or error, based on an understanding of the entity and its environment, including the entity's internal controls. • Obtain sufficient appropriate audit evidence about whether material misstatements exist, through designing and implementing appropriate responses to the assessed risks. • Form an opinion on the Financial Statements based on conclusions drawn from the audit evidence obtained. • Follow up on the implementation of the previous year's audit findings and recommendations and directives issued by PAC to ensure that proper action has been taken in respect of all matters raised. Office of the Controller and Auditor General AR/CG/DMDP/2016/2017 2 2.0 INDEPENDENT REPORT OF THE CONTROLLER AND AUDITOR GENERAL Accounting Officer, President's Office Regional Administration and Local Government, P. 0. Box 1923, DODOMA. REPORT ON THE AUDIT OF FINANCIAL STATEMENTS OF DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT P 123134 CREDIT IDA NO. 5585-TZ FOR THE FINANCIAL YEAR ENDED 30TH JUNE, 2017 Unqualified Opinion I have audited the Financial Statements of Dar es Salaam Metropolitan Development Project, which comprise the Statement of Financial Position as at 30th June, 2017, Statement of Financial Performance, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and Notes to the Financial Statements, including a Summary of Significant Accounting Policies set out from page 8. In my opinion, the accompanying Financial Statements of the Dar es Salaam Metropolitan Development Project presents fairly in all material respects , the Financial Position of the Project as at 30th June 2017, its Financial Performance and its Cash Flow for the year then ended in accordance with International Public Sector Accounting Standards (IPSAS) Accrual basis of accounting and in the manner required by the Public Finance Act, 2001 revised 2004. Basis for Opinion I conducted my audit in accordance with International Standards of Supreme Audit Institutions (ISSAls). My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of my report. I am independent of Dar es Salaam Metropolitan Development Project in accordance with the ethical requirements that are relevant to my audit of the Financial Statements in United Republic of Tanzania and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opi nion. Other Information Management is responsible for the other information. The other information comprises of the Management's Report and the Declaration by the Head of Finance but does not include the Financial Statements and our auditor's report thereon. My opinion on the Financial Statements does not cover the other information and I do not express any form of assurance conclusion thereon. In connection with my audit of the Financial Statements, my responsibility is to read the other information and , in doing so, consider whether the other information is materially inconsistent with the 3 Office of the Controller and Auditor General AR/DMDP /2016/2017 Financial Statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have performed on the other information that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. 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 IPSASs, and for such internal control as management determines is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error. In preparing the Financial Statements, management is responsible for assessing the entity's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the entity or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the entity's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements My 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 my 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. In addition, Sect. 10 (2) of the PAA No.11 of 2008 requires me to satisfy myself that, the accounts have been prepared in accordance with the appropriate accounting standards. Further, Sect. 48(3) of the Public Procurement Act No. 7 of 2011 requires me to state in my annual audit report whether or not the audited entity has complied with the provisions of the Law and its Regulations. 4 Office of the Controller and Auditor General AR/DMDP /2016/2017 • . • Report on Other Legal and Regulatory Requirements Compliance with the Public Procurement Act, 2011 In view of my responsibility on the procurement legislation and taking into consideration the procurement transactions and processes I have reviewed as part of th is audi t , I state that, DMDP procurement transactions and processes have generally complied with the requirements of the Public Procurement Act No. 7 of 2011 and its underlying Regulations of 2013. Benjamin Mas uri Magai Ag. CONTROLLER AND AUDITOR GENERAL, URT 31 st December, 2017. National Audit Office of Tanzania, P.O. Box 9080, 11101 Dar es Salaam, Tanzania. Tel : 255 (022) 2115157/8 Fax: 255 (022) 2117527 Email: ocag@nao.go.tz Copy to: Chief Secretary, State House, P.0. Box 9120, 1 Barack Obama Road, 11400 DAR ES SALAAM. Permanent Secretary and Paymaster General, Ministry of Finance, P.O. Box 9111 , 1 Madaraka Street, 11468 DAR ES SALAAM. 5 Office of the Controller and Auditor General AR/DMDP /2016/2017 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT THE UNITED REPUBLIC OF TANZANIA f r {. PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT r ( FINANCIAL STATEMENTS FOR THE DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT FOR THE FINANCIAL YEAR YEAR ENDED 30 JUNE 2017 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017 r CONTENTS PAGE [ Project Information r 1 r Management Report 2 to 5 Financial statements: f' 6 Statement of financial position ( Statement of financial performance 7 L Statement of changes in net assets 8 Cash flow statement 9 Statement of comparison of budget and actual amounts - by nature 10 Notes to the financial statements 11 to 19 ) THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT PROJECT INFORMATION AS OF 30 JUNE 2017 r PRINCIPAL PLACE OF BUSINESS Tanzania Strategic Cities Project, r 3 rct & 4 th Floor, Millenium Towers Building P. 0 . Box 31314, Kijitonyama Dar es salaam, { Tanzania. r· BANKERS National Bank of Commerce Ltd, Sokoine Drive & Azikiwe Street } P.O. Box 1863, Dar es Salaam, And f Bank of Tanzania, ( P.O.Box 2939, Dar es salaam. ACCOUNTING OFFICER Eng. Mussa I. lyombe, Permanent Secretary, PO-RALG, P.O.Box 1923, Dodoma. AUDITORS The Controller and Auditor General The National Audit Office P. 0 . Box 9080 Dar es Salaam Tanzania L J THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT r MANAGEMENT REPORT FOR THE YEAR ENDED 30 JUNE 2017 1. INTRODUCTION f. The Government of the United Republic of Tanzania (GoT) has received a credit from the International Development Association (IDA) and grant from the Nordic Development Fund for the Dar es Salaam Metropolitan Development Project (DMDP). The development objective of the DMDP is to improve urban services and institutional capacity in the Dar es Salaam Metropolitan Area, and to facilitate potential emergency response. The project will directly benefit approximately 1,500,000 residents in the broader Dar es Salaam area through improved urban infrastructure and services. Through improvements in basic infrastructure services and access of low-income community upgrading, approximately 100,000 low income households in 40 communities or sub-wards in 13 wards across the 3 Municipal Councils will benefit. The planning and capacity strengthening interventions (improving metropolitan governance arrangements, integrated transport and land use planning, and modernizing own source revenue and GIS systems) will have metropolitan-wide benefits. The PDO statement "to facilitate potential emergency response" will only be applicable if the contingency component is implemented. The project became effective in July 2015 and is managed through PO-RALG. The project comprises of four components, namely, Component 1: Component 1 - Priority Infrastructure. Component 2: Upgrading in Low-Income Communities. Component 3: Institutional Strengthening and Capacity Building. Component 4: Implementation Support and Monitoring & Evaluation 2 I THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT r 2. STATEMENT OF RESPONSIBILITY ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE, 2017. r These financial statements have been prepared by the management of the PO-RALG in accordance with the provisions of section 25(4) of the Public Finance Act. No 6 of 2001 . The financial statements comply with generally accepted accounting practices as required by the said Act and are presented in a manner consistent with the International Public Sector Accounting Standard (IPSAS). ( The management of PO-RALG is responsible for establishing and maintaining a system of effective Internal Control designated to provide reasonable assurance that the transactions recorded in the { accounts are within the statutory authority and that they contain the receipt and use of all public financial resources by the PO-RALG. 1. To the best of my knowledge, the system of Internal Control has operated adequately throughout the reporting period and that the accounts and underlying records provide a reasonable basis for the preparation of the financial statements for the 2016/17 financial year. I accept responsibility for the integrity of the financial statements, the information it contains, and its compliance with the public finance act No. 6 of 2001 (revised 2004} and the instructions issued by the Treasury in respect of the year under review. Eng. MUSSA I. IYOMBE ACCOUNTING OFFICER ..........>?-P/91}?~ .T.......... DATE 3 ( THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT STATEMENT OF DECLARATION OF THE HEAD OF FINANCE FOR THE PERIOD ENDED 30th JUNE 2017 The National Board of Accountants and Auditors (NBAA) according to the power conferred under the Auditors and Accountants (Registration) Act. No. 33 of 1972, as amended by Act No . 2 of 1995, requires financial statements to be accompanied with a declaration issued by the Head of Finance/Accounting responsible for the preparation of financial statements of the entity concerned. It is the duty of a Professional Accountant to assist the Board of Directors/Governing Body/Management to discharge the responsibility of preparing financial statements of an entity showing true and fair view of the entity position and performance in accordance with applicable International Accounting Standards and statutory financial reporting requirements. Full legal responsibility for the preparation of financial statements rests with the Board of Directors/Governing Body as under Directors Responsibility statement on an earlier page. I Melton E. Nyella being the Head of Finance/Accounting of The President's Office, Regional Administration and Local Government hereby acknowledge my responsibility of ensuring that financial statements for the year ended 30th June, 2017 have been prepared in compliance with applicable accounting standards and statutory requirements. I thus confirm that the financial statements give a true and fair view position of The President's. Office, Regional Administration Local Government as on that date and that they have been prepared based on properly ma· tained financial records. Position: Chief Accountant NBAA Membership No .: NBAA/CR No: 004711 Date: 30th September, 2017 I THE UNITED REPUBLIC OF TANZANIA PRESmENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT r MANAGEMENT REPORT FOR THE YEAR ENDED 30 JUNE 2017 (Continued) 3. FINANCIAL POSITION a) Property, plant and equipment During the financial year 2016/2017 US Dollar 485,810.00 has been used to purchase four wheel drive vehicles and furniture and fittings under PPE. b) Cash and cash equivalents Cash and cash equivalents comprise of cash at Bank .The balance of US Dollar 9,157,312.42 is the actual amount of money held at the National Bank of Commerce and Bank of Tanzania at the end of financial year ended June 30, 2017. 1 4. FINANCIAL PERFORMANCE Revenue a) Transfer from other entities This is the transfer of funds from World Bank who is the financier of the Program. During the first six months of financial year, 2016/2017 a total of USD. 11,403,026.24 were received for implementation ol program activities. b) Finance income Finance income is mainly obtained from interest gained on monthly balances from our Bank Accounl with National Bank of Commerce. During the year the project received a total of USO 6,400.55 as interest from National Bank of Commerce. Expenses a) Wages, salaries and employee benefits There was no salaries paid during the financial year 2016/2017. b) Contractual Services Includes Works contracts and supervision consultancies paid directly by PO-RALG on behalf of LGAs During the year a total of USD. 3,941,936.20 has been spent in the category. c) Grants and other transfer payments During the Financial Year 2016/17 the project acquired Assets (Motor vehicles} amounting to USC 543,068.36 for Implementing DLAs and distributed to the respective DLAs for project Implementation this amount has been accounted for as grants and other transfer payments made during the financia year 2016/2017 THE UNITED REPUBLIC OFT ANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT 5. AUDITORS The Controller and Auditor-General (CAG) is the statutory auditor for the project pursuant to the provisions of Article 143 of the Constitution of the United Republic of Tanzania of 1977 (revised 2000), Section 9 - 12 of the Public Audit Act, 2008, and Public Finance Act No 6 of 2001 (revised 2004}. ( Eng. MUSSA I. IYOMBE PERMANT SECRETARY Date: ,-?() q\~\T.. ..... [ 6 ,_ THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE - REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT r STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017 Notes 2017 2016 f USO USO ASSETS Current assets \ Cash and cash equivalents 14 9,157,312 8,006,504 Receivables and prepayments 16 4,717,737 l Non-current assets 13,875,049 8,006,504 Property, plant and equipment 17 477,164 f 477,164 l TOT AL ASSETS 14,352,213 8,006,504 LIABILITIES Current liabilities Payables 15 744,668 118,157 744,668 118,157 TOT AL LIABILITIES 744,668 118,157 NET ASSETS 13,607,545 7,888,347 NET ASSETS Accumulated surplus/(deficit) 13,607,545 7,888,347 Revaluation surplus TOT AL NET ASSETS 13,607,545 7,888,347 Accountin Officer ...:so iO°" Date Date 7 THE UNITED REPUBLIC OF TANZANIA J PRESIDENT'S OFFICE· REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT f STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2017 Notes 2017 2016 USO USD Revenue {' Transfers 7 11,40-3,026 10,443,143 Finance income 7A 6,401 927 Gain on foreign currency translation 13 4,553 ( 11,413,980 10,444,070 Expenses Grants and other transfer payments 8 543,068 95,267 Supplies and consumables used 10 1,009,844 314,633. Maintenance expenses 11 199,933 Contractual services 12 3,941 ,936 2,144,845 Loss on foreign currency translation 978 ,- Total Expenses 5,694,781 2,555,723 Surplus/(deficit) during the year 5,719,198 7,888,347 Accounting Officer O / 1 I 00 fJ Cj 2-o) t D~e • Date 8 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE· REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT r STATEMENT OF CASH FLOW FOR THE YEAR ENDED 30 JUNE 2017 r Cash flows from operating activities 2017 USD 2016 USO Surplus/(deficit) before taxation 5,719,198 7,888,347 r Adjustments for: Expenses Payable Receivable and Pre payments 626,512 (4,717,737) 118,157 r Depreciation and amortisation Grant amotisation Foreign exchang.e loss 8,645 Investment income Loss/gain on disposal of assets Interest expense l Cash generated from operations 1,636,618 8,006,504 Interest paid l Net cash from operating activities 1,636,618 8,006,504 { Cash flows from investing activities Purchase of property, plant and equipment 18 (485,810) Investments with LGLB Purchase of intangible assets Purchase of investment property Acquisition of investments Net cash from investing activities (485,810) Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Development Grants Received Grants refunded/transferred Net cash used in financing activities Net increase in cash and cash equivalents 1,150,808 8,006,504 Cash and cash equivalents at beginning of period 8,006,504 Cash and cash equivalents at end of period 9,157,312 8,006,504 Accou nting Officer n U({) } 0 erQ l--Qf{: q 20rt Date ' I THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE· REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 30 JUNE 2017 Accumulated surplus/deficit Revaluation surplus Total USO USO USO Balance at 1 July 2016 7,888,347.00 7,888,347 Changes in accounting policy Restated balance 7,888,347 7,888,347 Changes in revaluation surplus/( deficit) Surplus/(deficit) for the year 5,719,198 5,719,198 Transfer to and from surplus/deficit Balance at 30 June 2017 13,607,545 13,607,545 Accounting Officer Date ~0 { ~J 2-01 i- THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNl.i1ENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNT FOR THE YEAR ENDED 30th June 2017 Budget approved on the Cash Basis (Classification of Payments by Nature) Actual Amou " t (A) Final Budget(B) Original Budget Difference(B-A) TZS TZS TZS TZS CASH INFLOWS Transfer from Wold Bank 11,409,426 .79 11,409,426.79 11,409,426.79 0.00 TOTAL RECEIPTS 11,409,4:=!6. 79 11,409,426 .79 11,409,426.79 (11 ,409,426.79) CASH 01,.JTFLOWS Payments Property, plant and equipment 485,800.50 1,120,274 .24 1,120,274 .24 634,464 .74 Grants and Other Transfer Payments 543,068.36 0.00 0.00 (543,068.36) Supplies and consumables used 486,085 .27 10,924 ,176.04 11 ,174,176.04 10,688,090.77 Maintenance expenses 199,932 .93 1,600,001 .55 1,100,001 .55 900,068.62 Contractual services 3, 72 1,026.93 56,677 ,920.88 56,677 ,920.88 52 ,956,893.95 TOTAL PAYMENTS 5,435,922.99 70,322,372.71 64,636,449.72 NET CASH FLOWS 5,973,5• .3.80 (58,912,945.92) (76,045,876.51) Permanent Secretary Date Integrated Financial Management System THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT f NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. 1. PROJECT INFORMATION The Dar es Salaam Metropolitan Development Project is a project established by the Government of Tanzania through President's Office, Regional Administration and Local Government. Financing of the project amounts to USO 330.30 million whereby USO 300 million is contributed by IDA credit and USO 5 million from Nordic Development Fund and 25.30 million contributed by the Government of Tanzania. All of the Government of Tanzania financing will be for Resettlement Action Plan (RAP) costs for llala MC, Kinondoni MC and Temeke MC. The Financing Agreement (FA) for DMDP was signed on March 12, 2015 and the Credit became operational on July 2015 after the opening of program bank account at NBC and Bank of Tanzania (BOT). 2. PRINCIPAL ACTIVITIES DMDP Development Objective is to improve urban services and institutional capacity in the Dar es Salaam Metropolitan Area, and to facilitate potential emergency response. The project includes four components as follows: Component 1: Component 1 - Priority Infrastructure. (i) Sub-Component 1a - Priority roads supporting public transit. mobility, and connectivity to low income communities. Construction and improvement of priority sections of local and feeder roads in the urban core areas of the Dar es Salaam Metropolitan Reg.ion . (ii) Component 1b: Flood Control and Storm Water Drainage. Improvement of the primary and secondary drainage system around selected river basins of the Dar es Salaam Metropolitan Region , including through bank stabilization, lining, detention ponds, and connections to the secondary network. (iii) Component 1c: Contingency for Disaster Risk Response. Enhancement of preparedness for and provision of rapid response to disaster emergency and/or catastrophic events as needed. Component 2: Upgrading in Low-Income Communities. DMPD upgrading criteria was developed to identify priority communities, targeting: (i) Dense, highly populated (and low-income) areas with poor infrastructure; (ii} Opportunities to connect to the primary road and drainage network financed through DMDP; (iii) Investments that would not further encourage sprawl, but densification. Component 3: Institutional Strengthening and Capacity Building. (i) Component 3a: Improving Metropolitan Governance Arrangement and Systems. The (ii) Component 3b: Improving Own Source Revenue Collection Systems and Mainstreaming Geographic Information Systems (iii) Component 3c: Support for Integrated Transport and Land-use Planning (iv)Component 3d: Strengthening Operations and Maintenance Systems. 12 THE UNITED REPUBLIC OF TANZANIA r PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT (v) Component 3e: Urban Analytics. f (vi) Component 3f: Urban Planning Systems. r Component 4: Implementation Support and Monitoring & Evaluation This component will enable the key implementing agencies (PO-RALG, DLAs and DART Agency) to r 1' I execute the project. It will include operational costs for the direct project management and supervision functions, including procurement, accounting, financial management, monitoring and evaluation (M&E}, audit of project accounts, meetings and workshops, and impact assessments. 3. AUTHORISATION OF FINANCIAL STATEMENTS I The Financial statements for the year ended 301h June 2017 were authorized for issue on 30 September 2017 by the Permanent Secretary President's office Regional Administration and Local Government. 4. BASIS OF PREPARATION The financial statements have been prepared on a historical cost basis. The financial statements are presented in USO currency. Statement of compliance The financial statements of the DMDP have been prepared in accordance with International Public Sector Standards (IPSAS) and comply with the public Finance act 2001. 5. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES The accounting policies adopted are consistent with those of the previous financial year. 6. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies adopted, which are expected to be consistent, are shown below. Foreign currency translation Functional and presentation currency Items included in the financial statements of the project are measured using the currency of the primary economic environment in which the project operates ("the functional currency") . The financial statements are presented in USO, which is the project's presentation currency. Transactions and balances Local currency transactions are translated into USO using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in local currencies are recognized in the statement of financial performance. Local currency balances of receivables and payables 13 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT recognized in the statement of financial performance. Local currency balances of receivables and payables have been translated at the Bank of Tanzania mean closing exchange rate of TZS 2,219.05/USD ruling at the end of the year 30th June 2017 . Cash and cash equivalents Cash and bank balances in the statement of financial position comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less, and is measured at amortized cost For the purpose of the statement of cash flow, cash and cash equivalents consist of cash and cash r equivalents as defined above, net of outstanding bank overdrafts. Employment benefits Employee benefits include salaries and other related - employment costs to non-civil servant - project r staff on contractual basis. Other staff in the project are Permanent and pensionable staff whose employment benefits are dealt with by PO-RALG head office. I Revenue from exchange transactions Revenue is recognised to the extent that it is probable that the economic benefits will flow to the project i and the revenue can be reliably measured. I Revenue from non-exchange transactions Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Project and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized: t Transfers Transfers are not recogn ized until there is reasonable assurance that the project will comply with the cond itions attaching to them and the fund will be received . Property, plant and equipment The project has adopted the provisions of Section 95 of IPSAS 17 Property Property (PPE). The PPE is stated at cost less Accumulated depreciation and accumulated impairment. Depreciation is calculated on straight line basis over the useful life of the Asset .The annual rates of depreciation which are applied based on Government policy are as defined bellow; Estimated Useful No. Asset Category life Yrs 1 Plant and Machinery 15 2 Furniture and fixture 5 3 Office Equipment 5 4 Motor Vehicle s Light duty (below 5 tons} 5 5 Computer (Desk tops and laptops} 4 The amount of depreciation has been calculated on apportionment basing on the months of purchase. 14 THE UNITED REPUBLIC OFTANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT r DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th June 2017 2017 2016 Actual Actual Receipts/Expenditure Receipts/Expenditure USO USO Note 07 - Transfer from Wold Bank r Income 11,403,026.24 10,443,143.00 Total 11,403,026.24 10,443,143.00 Note 07 A - Finance Income Bank Interest and other Investment Income 6,400.55 927.00 I. Total 6,400.55 927.00 Note 08 - Grants and Other Transfer Payments Transfers to DSM LGAs 543 ,068.36 95,267.00 Total 543,068.36 95,267.00 Note 09 - Wages, salaries and employee benefits Non-Civil Servant Contracts 0.00 0.00 Total 0.00 0.00 Note 10 - Supplies and consumables used Accomodation Allowance 70,420.10 0.00 Advertising and Publication 30,718.31 9,193.55 Air Ticket - Foreign 59,966.68 0.00 I Air ti cket - Local Bank Chargies and Commiss ion 9,152.17 288.61 0.00 726.78 Computer Software 0.00 0.00 Computer Supplies and Accessories 0.00 94,150.28 Conference Facilities 115,709.50 16,466.30 Depreciation Expense 8,645.08 0.00 Diesel 42,120.34 481 .53 Electricity 467 .71 0.00 Food and Refreshment 12,748.86 0.00 Office Consumables (papers .pencils etc) 353,248.21 35,277.67 Outsourcing Costs 0.00 0.00 Per Diem - Domestic 246,409.16 87,456.05 Perdiem- Foreign 35,357 .00 2,355.00 Posts and Telegraphs 0.00 0.00 Printing and Photocopy paper 5,929 .77 7,705 .12 Rent - Office Accommodation 16,438.35 0.00 Tuition Fees 0.00 60,820.72 Visa Application Fees 2,224.00 0.00 Total 1,009,843.85 314,633.00 15 r Note 11 - Maintenance expenses Maintanace of PPE 199,932.93 0.00 Total 199,932.93 0.00 r Note 12 - Contractual services Civil works Consultancy 2,538,605.46 1,403,330.74 0.00 2,144,845.00 r Total 3,941,936.20 2,144,845.00 Note 13 - Loss on Foreign Currency Translation r Exchange Gain/Loss Total (4,553.04) (4,553.04! 978.00 978.00 r Note 14 - Cash and cash equivalents BOT Cash Account 8,122,590.60 7,605,854.00 NBC DMDP Project - Foreign Account. 789,626.30 380,409.00 NBC DMDP Project - Local Account 245,095.52 20,241 .00 Total 9,157,312.42 8,006,504.00 r Note 15 - Payables Retention Payable 220,909.27 0.00 Staff Claims 2,784.98 0.00 Supplies of Goods and Consumables 148,591.19 0.00 Utilities 461.58 0.00 Withholding tax 371,920.83 118,157.00 Total 744,667.85 118,157.00 Note 16 - Receivables and prepayments Advance Payment 4,717,736.74 0.00 Total 4,717,736.74 0.00 Note 17 - Property, plant and equipment Depreciation Expense (8,645.08) 0.00 Four Wheel Drive Vehicles 466,519.55 0.00 Furniture and Fittings 19,289.95 0.00 Total 477,164.42 0.00 16 ,- - - - --, --, -, RECEIVABLE AS AT 30 JUNE 2017 (ADV PAYMENT) B DMDP - PROJECT NAME CONTRACTOR CONTRACT SUM ADV/PAID ADV/RECOV£RED UN RECOVED ADV/PAID CUMM IN USO TZS USO TZS USO TZS lJSD TZS USO ILALA UWP CONSULTING 4,709,004.76 568,672.19 213,252.02 355,420.17 355,420.17 (Pty) LTD CHINA RAILWAY 2,220,3 27, 180.00 4 ,053 ,633 .68 333,049,077.00 608,045.00 84,034,124.19 249,014,952.81 608,045.00 720,261.41 SEVENTH GROUP T LTD TEMEKE KYONG DONG 4, 265,400.00 639,810.00 266, 587.50 373,222.50 373,222.50 ENGINEERING CO LTD M/S CJRE EAST 6,501,201,788.40 6 , 926,730.64 975,180,268.26 1,039,009.60 261,459,517.87 713,720,750.39 1,039,009.60 1,360,641.62 AFRICA LTD Kl NON DON I M/S H.P GAUFF EUR 4,876,580 402,833.00 Eur 731,487 60,424.95 Eur 304,786.38 Eur 426,700.62 60,424.95 547,930.41 INGENIEURE GmbH &CO M/5 ESTIM 22, 814,708,723 3,422,206,308.45 403,706,348.88 3,018,499 ,959. 57 1,360,260.63 CONSTRUCTION CO LTD TOTAL 2,915,961.74 479,839.52 3,981,235 , 662. 77 2,436,1 22.22 4,717,736.74 ER EUR 1 = 1.1426 USO Eur 426,700.62 USO 1 = 2219.05 ,. - - - - - --, THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE· REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 30 JUNE 2017 17 PROPERTY, PLANT AND EQUIPMENT Cost / Revaluation Accumulated deereciation and Ac.cumulated imeairment Revaluation Balance Balance Depreciation Impairment Balance Carrying value 01 Jul~ Additions Transfers Revaluation Diseosal 30 June 01 Jul~ charge charge Diseosal 30 June 30 June 201 7 Administration assets Leasehold land 0.00 0.00 0.00 0.00 0.00 Buildings 0.00 0.00 0.00 0.00 0.00 Motor vehicles 0.00 466519.55 466519.55 6073.09 6073.09 460446.46 Plant, machinery and equipments 0.00 0.00 0.00 0.00 0.00 0.00 Office and residential furniture & equipments 0.00 19289.95 19289.95 2571.99 2571 .99 16717.96 Computer equipments 0.00 0.00 0.00 0.00 0.00 0.00 Work in progress 0.00 0.00 0.00 0.00 0.00 485809.50 0.00 0.00 0.00 485809.50 0.00 8645.08 0.00 0.00 8645.08 477164.42 infrastructural assets Leasehold land 0.00 0.00 0.00 Sewerage system 0.00 0.00 0.00 Water system 0.00 0.00 0.00 Water wells Drainage network 0.00 0.00 0.00 Road network 0.00 0.00 0.00 Educational network 0.00 0.00 0.00 Health network 0.00 0.00 0.00 Agriculture and livestock extension system 0.00 0.00 0.00 Work in progress 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total 0.00 485809.50 0.00 0.00 0.00 485809.50 0.00 8645.08 0.00 0.00 8645.08 477164.42 - - - --, -- CREDITORS FOR 2016/2017 (PAYABLES) DMDP - PROJECT BOT Exchange rate as at 30/06/2017 2219 .05 SINO CONTRACTOR/SUPPLIER WORKS/ SERVICE/ GOODS INVOICE No INVOICE DATE AMOUNT TZS USD 1 Toyota Tanzania Ltd Procurement of 3 Motor Vehicles Various 29/06/2017 223,673,871.80 100,797.13 2 Wino Works Ltd Service for DFP 8967 '0057 06/06/2017 2,394,300.00 1,078.98 3 Mtana Estate Limited Conference Facilities 855 13/06/2017 4,794, 500.00 2, 160.61 4 Antelope Tours & Travel Services Air Ticket TIN 17060782 23/6/2017 865, 211 . 86 389 .90 5 Antelope Tours & Travel Services Ai r Ticket TIN 17060799 23/6/2017 3, 191 ,327.44 1,438 . 15 6 Antelope Tours & Travel Services Air Ticket TIN 17060663 24/6/2017 419 ,711 . 86 189. 14 7 Antelope Tours & Travel Services Air Ticket TIN 17060665 26/6/2017 419,711 .86 189.14 8 Antelope Tours & Travel Services Air Ticket TIN 17060806 29/6/2017 666,051 . 86 300.15 9 Antelope Tours & Travel Services Ai r Ticket TIN 17060780 30/6/2017 1,785 ,663.72 804 .70 10 The Life Land Traders Procurement of Tyres for DFP 968 2767 29 / 6/2017 3,900,000.00 1,757.51 11 The Life Land Traders Procurement of Tyres for DFP 9246 2753 30/6/2017 3,000,000.00 1, 351 .93 12 The Life Land Traders Procurement of Tyres for DFP 2792 2751 29 / 6 / 2017 3,900,000.00 1,757 . 51 13 The Life Land Traders Procurement of Tyres for DFP 663 2673 06/12/2017 3,350,000.00 1, 509 .66 14 The Life Land Traders Procurement of Tyres for DFP 3392 2699 30/6/2017 3,350,000.00 1, 509 .66 15 The Life Land Traders Procurement of Tyres for DFP 3391 2698 30/6/2017 3,350,000.00 1, 509 .66 16 The Life Land Traders Procurement of Tyres for DFP 3393 2700 30/6/2017 3,350,000.00 1, 509.66 17 Camel Oil (T) Ltd Procurement of Fuel Various 27/6/2017 4,978 , 560.00 2, 243 . 55 18 Comp Com (T) Ltd Supply of Office Consumables 142177 16/6/2017 22 ,726 ,000.00 10, 241.32 19 Multvision Investment Co. Ltd Supply of Office Consumables 413 30/6/2017 20,057 , 500.00 9,038 .78 .. 20 Wino Works Ltd service for DFPA 969 0870 06/07/2017 1, 047,650.00 472 . 12 21 Camel Oil (T) Ltd Procurement of Fuel Various 30/6/2017 17,713 ,520.00 7,982.48 22 LAPF Offi ce Utili t i es SINV 13596 30/06/2017 1,024, 276 .31 46 1.58 23 Bernard Mabagala Salary for may 2017 06/ 05/2017 6, 180,000.00 2, 784 .98 24 CFAO service for DFPA 818 26005102 16/6/2017 797,699.75 359.48 25 M/S ESTIM CONSTRUCTION CO LTD Retention 30/6/2017 269,137,565 .92 121 , 285.04 26 MIS CJRE EAST AFRICA LTD Retention 30/6/2018 174,306,371.79 78,550 .00 27 CHINA RAILWAY SEVENTH GROUP T LTD Retention 30 / 6/2019 46,764,775.41 21 ,074.23 TOTAL - j./"; .; ... ·- ,::', . ! ·, ' ~- . ~-.... _"-- - . ' 827, 144.,269.58 372,747.02