nstitution Name Document No. General Wingate Polytechnic College Gw/501-13 Effective Date 2010 Title: - Cover Letter for Audit Report Assue No Page No. of I RefNo: j ! - i / § I Date: 1-kf) i2 2 EASTRIP TTL World Bank, African Region Ethiopia Country Office Addis Ababa Subject: Submission of Audit Report Please find attached here with the audit report of General Wingate Polytechnic College (GWPTC) - East Africa Skills for Transformation and Regional Integration Project (EASTRIP) financed under IDA 63350 Project No. 163399 for the year ended July 07/2020. The Audit Report includes one copy of + Independent Auditors Report and Financial Statement + Management Letter * Statement of Designated Account With regards, CC: NELEST. J I ED Ministry of Finance - - Ministry of Science and Higher Education Office of the Federal Auditor General * Addis Ababa Office of the College Dean r Finance Directorate 'w EASTRIP-PIU Office GWPTC, Addis Ababa GENERAL WINGATE POLYTECHNIC COLLEGE EAST AFRICA SKILLS FOR TRANSFORMATION AND REGIONAL INTEGRATION PROJECT FINANCIAL STATEMENTS AND AUDIT REPORT JULY 7,2020 Kokeb & Melkamu Audit Partnership Chartered Certified Accountants (UK) Authorized Auditors in Ethiopia P. 0. Box 33645 Addis Ababa, Ethiopia Telephone 251-11-6-16-69-56 E-mail: kokmelk@ethionet.et Mob.Tel. 251-91-120-37-78/51-61-46 Fax 251-11-552-26-88 GENERAL WINGATE POLYTECHNIC COLLEGE EAST AFRICA SKILLS FOR TRANSFORMATION AND REGIONAL INTEGRATION PROJECT FINANCIAL STATEMENTS AND AUDIT REPORT FOR THE PERIOD ENDED 7th JULY2020 TABLE OF CONTENTS Independent A uditors' R eport ......................................................................................1-2 The Statem ent of Financial Position................................................................................ 3 The Statement of Sources and Uses of Funds................................................................. 4 The Statem ent of D esignated A ccount............................................................................ 5 N otes to the Financial Statem ents.................................................................................6-9 1 Kokeb & Melkamu Audit Partnership Chartered Certified Accountants (UK) INDEPENDENT AUDITORS' REPORT ON THEFINANCIAL STATEMENTS OF GENERAL WINGATE POLYTECHNIC COLLEGE EAST AFRICA SKILLS FOR TRANSFORMATION AND REGIONAL INTEGRATION PROJECT Opinion We have audited the accompanying financial statements of the General Wingate Polytechnic College East Africa Skills for Transformation and Regional Integration Project comprising the statement of financial position as at July 7th, 2020 , the statement of sources and uses of funds, and statement of designated account for the period then ended , and a summary of significant accounting policies and other explanatory information shown from pages 3 to 9. In our opinion, the financial statements present fairly, in all material respects, the financial position of the East Africa Skills For Transformation and Regional Integration Project implemented by the General Wingate Polytechnic College, the Statement of Sources and Uses of Funds for period covering January 9, 2020 up to July 7, 2020 in accordance with the financial management policy of the Ministry of Science and Higher Education (MoSHE) adopted for the Project In addition, the Project was, in all material respects, in compliance with the Financing Agreements and Contracts. With respect to the statements of sources and uses of funds submitted during the period listed on page 4, in our opinion: (a) The statements, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; (b) The project accomplishment on the basis of budget to actual expenditure is nil, showing poor performance. (c) The proceeds of the Designated account have been used exclusively for eligible expenditures and provisions and covenants of the Financing Agreement and Separate Agreement have been substantially respected. Basis for opinion We conducted our audit in accordance with the International Standards on Auditing applicable to the audit of financial statements. Furthermore, we have audited the Project's compliance with the provisions and covenants of the International Development Association (Credit No. 6335-ET and Grant No. D395-ET) Financing Agreements. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Organization in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accounts (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Ethiopia, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we h obtained is sufficient and appropriate to provide a basis for our opinion. 2 Management's Responsibility for the Financial Statements The management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting policies of the Project, and for such internal control as management determines is necessary to enable the preparation of a project report that is free from material misstatement, whether due to fraud or error. Auditor's Responsibility for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the project report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. In addition, we are required to audit all EEPs submitted to the World Bank in support of requests for achievement of Disbursement Linked Indicators (DLIs) and examine expenditures for eligibility based on criteria defined in the terms of the financing agreement and detailed in the Project Appraisal Document. The engagement partner on the audit resulting in this independent auditor's report is Ato Kokeb Moges. 4e kamu A artnefrsip Addis Ababa Chartered Certified Accountants (UK) December 22, 2020 Authorized Auditors in Ethiopia P. 0. Box 33645Addis Ababa, Ethiopia Telephone: 251-11-6166956 E-mail: kokmelka- ethionet.et Mobile Tel. 251-91-120-37-78/51-61-46 Fax 251-11-552-26-88 3 GENERAL WINGATE POLYTECHNIC COLLEGE EAST AFRICA SKILLS FOR TRANSFORMATION AND REGIONAL INTEGRATION PROJECT STATEMENT OF FINANCIAL POSITION AS AT JULY 7, 2020 Currency: E ASSETS CURRENT ASSETS Notes Cash at banks 3 143,814,641 Total Assets 143,814,641 CURRENT LIABILITIES Account Payables - REPRESENTED BY Restricted Fund 4 143,814,641 Total Liabilities and Fund 143,814,641 4 GENERAL WINGATE POLYTECHNIC COLLEGE EAST AFRICA SKILLS FOR TRANSFORMATION AND REGIONAL INTEGRATION PROJECT STATEMENT OF SOURCES AND USES OF FUNDS FOR THE PERIOD JANUARY 9, 2020 UP TO JULY 7, 2020 Currency: ETB Notes SOURCES MAIN 7 IDA Credit 7.1 130,800,540 OTHER Gain on foreign currency exchange 13,014,101 TOTAL 143,814,641 USES 8 Strengthening governance and management 8.1 - EXCESS OF SOURCES OVER USES 143,814,641 5 GENERAL WINGATE POLYTECHNIC COLLEGE EAST AFRICA SKILLS FOR TRANSFORMATION AND REGIONAL INTEGRATION PROJECT STATEMENT OF DESIGNATED ACCOUNT FOR THE PERIOD JANUARY 9, 2020 UP TO JULY 7, 2020 IDA Credit Account No. 102401300006 Depository Bank National Bank of Ethiopia Related Credit and Grant Credit No. 6335-ET and Grant No. D395-ET Address Addis Ababa, Ethiopia Currency USD USD Birr Opening balance brought forward . Add:-Transferred from World Bank-Credit 4,104,100 130,800,540 4,104,100 130,800,540 Less:- Transferred to Birr account - Bank charges . Add:- Gain on exchange - 13,014,101 Ending balance,7 July 2020 4,104,100 143,814,641 6 GENERAL WINGATE POLYTECHNIC COLLEGE EAST AFRICA SKILLS FOR TRANSFORMATION AND REGIONAL INTEGRATION PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD COVERING JANUARY 9, 2020 UP TO JUNE 30, 2020 Currency: Ethiopian Birr 1. BACKGROUND The East Africa Skills for Transformation and Regional Integration ( US$293 million, out of which 150 million is for Ethiopia ) was approved by the World Bank- IDA financing in October 2018 to address critical skills shortage in growing sectors including agriculture, energy, ICT, manufacturing, and transport in Ethiopia, Kenya, and Tanzania and to promote regional integration. The East Africa Skills for Transformation and Regional Integration Project (EASTRIP) brings a regional approach to developing the specialized TVET skills by creating a small cluster of regional TVET Centers of Excellence. Each center will specialize in specific sectors and occupations with niche programs in highly specialized TVET diploma and degree programs, as well as industry recognized short-term courses. Mobility of students, graduates, and faculty will facilitate a healthy exchange of skilled labor within the region so that each country does not have to produce all the skills at once. The sharing of standards, curriculum, and training facilities will help reduce costs for each center. At the same time, demonstrations will help inform and guide the broader array of national TVET reforms in these countries. The regional TVET Centers of Excellence can serve the labor needs of major regional infrastructure projects. The Project has three main components: Component (1) Strengthening selected Regional Flagship TVET Institutes for high- quality skills development in priority sectors, Component (2) Creating national TVET enabling environments, and Component (3) Enhancing regional collaboration in TVET and project coordination. The Project runs from October 2018 up to December 2024, and one of the selected vocational school selected for this Project in Ethiopia is General Wingate Polytechnic College. General Wingate Polytechnic College was established in April 1946 as a secondary school during the reign of his imperial majesty Haile Selassie I. the college has the experience of delivering education & training for more than 70 years and is still in operation. It transformed to technical school later on with the change of government and the country's education policy. It reorganized into TVET institution, which finally upgraded to a college level since 2004. The college provides a comprehensive range of full- time and extension classes in 12 departments with 42 programs from level I up to IV. In addition, it provides part-time programs and short-term course. Since February 2011, the college performs at a Polytechnic level and provides training program up to level five 2. ACCOUNTING POLICIES EASTRP follows the government's accounting policy of modified cash basis of accounting system with double entry recording taking into account the decentralized accounting structure of the project. In preparation and presentation of the financial statement, the project uses principal policies such as a) Income and expenditure recognition The income is recognized on the basis of actuaLRash receipt whereas expenditure recognition is on modified basis. ,. 7 b) Fixed assets Fixed asset acquired for the project are shown as an expenditure in the year it occurs and reported on memorandum records. c) Foreign currency transactions. Transaction in foreign currencies are translated using the exchange rate prevailing on the date of the transaction. 8 GENERAL WINGATE POLYTECHNIC COLLEGE EAST AFRICA SKILLS FOR TRANSFORMATION AND REGIONAL INTEGRATION PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD JANUARY 9, 2020 UP TO JULY 7, 2020 Currency: Ethiopian Birr 3. CASH AND CASH EQUIVALENT National Bank of Ethiopia(USD) - DA,ACC NO. 0102401300006 143,814,641 4.FUND BALANCE Balance brought forward - Add: excess of expenditure over income 143,814,641 Balance carried forward 143,814,641 5. SOURCE OF FUNDS Sources USD Rate ETB 5.1 Transfer from IDA credit 17-Jan-20 4,104,100.00 31.8707 130,800,540 9 GENERAL WINGATE POLYTECHNIC COLLEGE EAST AFRICA SKILLS FOR TRANSFORMATION AND REGIONAL INTEGRATION PROJECT FOR THE PERIOD COVERING JANUARY 9, 2020 UP TO JULY 7, 2020 6. USES OF FUNDS BY PROJECT COMPONENTS AND CATEGORY Annual Budget utilization in Project Components & Category Plan/Budget Actual utilization Variance % Component 1: Strengthen Selected Regional Flagship TVET Institutions Development Sub Component 1,1: Strengthening governance and managen- 0% Sub Component 1.2: Institutionalizing industrial links - Sub Component 1.3: Developing market relevant and competency- based training programs Sub Component 1.4: Training of TVET managers and teachers/trainers - Sub Component 1.5: Provision of key training facilities and equipment - Suo Componen. I. uutreacn ana support for non-project national TVET - Sub Total Component 1 - - 0% Component 2: Creating national TVET enabling environments Sub Component 2.1: Strengthening national TVET quality assurancet - Sub Component 2.2: Capacity building for TVET policy development and implementation - Sub Component 2.3: Promoting regional integration . - Sub Component 2.4: Facilitating national project coordination and M&E - - - Sub Total component 2 - - 0.00% Total . - 0%