NIGERIA STATE HEALTH INVESTMENT PROJECT WORLD BANK CREDIT NO_NG50940 AUDITED FINANCIAL STATEMENT FOR THE YEAR ENDED 31ST DE 019 AO F.A.O. OSEKITA & CO 0 +\CO (CHARTERED ACCOUNTANTS) Suites 42, Akure Shopping Complex Ado/Owo Road, Akure, Ondo State Tel: 08030677462; 08051078912 NIGERIA STATE HEALTH INVESTMENT PROJECT (NSHIP) REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER, 2018 CONTENTS PAGE Corporate Information 2 Project Principal Activities 3 Audit Certificate 4 to 5 Balance sheet 6 Cash Flow Statement 7 Statement of Accounting Policies 8 Notes to the Account 9 to 13 Special Account Reconciliation Statements 14 NIGERIA STATE HEALTH INVESEMENT PROJECT (NSHIP) REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER, 2018 CORPORATE INFORMATION MANAGEMENT/PROJECT DIRECTORS Honourable Commissioner of Health Dr. Wahab Adegbenro (Chairman, NSHIP Steering Committee) Executive Secretary Dr Akanbiemu Adegoke Francis (Chairman, Techinical Working Group) Head of PFMU Mr. Akinkotu Okunade PROJECT IMPLEMVENAINUT State Project Coordinator - Dr Paulinus K. Omode Chief Programme Officer - Dr, Olubunmi Olakunle Project Accountant - Mr. Temijana M. Olaniyi Project M& E Officer - Mr Similoluwa Bamigboye Procurement Officer - Mrs Adeosun Olubukola Communications Officer - Mr Adeleye Kehinde Internal Auditor Mr Baale Olarinde External Auditor- F.A.0 Osekita & Co (Chartered Accountants) Suite 42, Akure Shopping Centre Alagbaka, Akure, Ondo State Banker Fidelity Bank Plc 2 NIGERIA STATE HEALTH INVESEMENT PROJECT (NSHIP) REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER, 2018 PROJECT PRINCIPAL ACTIVITIES The Principal Activities of the World Bank Assisted Nigeria State Health Investment Projct are: 1) To increase the delivery and utilization of high impact maternal, child, reproductive and disease control health interventions particularly among the poor and improve the quality of care provided in publicly-financed health facilities within project states, 2) To improve the quality of care provided in publicly-financed health facilities within Ondo State. F. A. 0. OSEKITA & CO. 8+00 (CHARTERED ACCOUNTANTS) Ministry of Health, Akure, Ondo State. Dear Sir, REPORT OF THE AUDITORS ON THE FINANCIAL STATEMENTS OF THE WORLD - BANK ASSISTED NIGERIA STATE HEALTH INVESTMENT PROJECT FOR THE YEAR ENDED 31ST DECEMBER 2018 (CREDIT NO. NG 50940) We have audited the accompanying Financial Statements of World-Bank Assisted Nigeria State Health Investment Project, which comprise the Statement of Financial Position as at December 31, 2018 and the Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Project Managements' Responsibility for the Fin ancia IStatements The Project Management are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Standards as applicable in Nigeria 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. Auditor's Responsbilit Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Nigerian Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about 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, An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 4 1, Aduralere Way Suite 1,2,&3, Akure Shopping Complex 24, Onibode Street, P. O. Box 2, P 0 Box 1761, Oke-Oniyo, Ado Ekiti. Iworoko Ekiti. Ekiti State. Akure, Ondo State, Ekiti State. Tel.: 030-250271 Tel,: 034-240113, 08030677462, 08189773475. Tel.: 030-250271 Opinion In our opinion, the accompanying Financial Statements give a true and fair view of the financial affairs of World-Bank Assisted Nigeria State Health Investment Project as of December 31, 2018 and of its financial performance and Cash Flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Institute of Chartered Accountants of Nigeria Act. The Statement of Expenditures (SOEs) 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, and which expenditures are eligible for financing under the credit agreement. F.A.O Osekita & Co (Chartered Accountants) Akure, Nigeria. 3IAN 0884507 5 NIGERIA STATE HEALTH INVESTMENT PROJECT BALANCE SHEET FOR THE YEAR ENDED 31ST DECEMBER, 2019 2019 2018 NOTESNN EMPLOYEMENTOF FUND DEVELOPMENT OF CAPITAL EXPENDITURE 3 1,005,274,319 431,812,473 RESULTS BASED APPROACH - OPERATING COST 2 766,610,274 560,980,334 PERFORMANCE BASED FACILITY FINANCING (PBFF) 4 4,272,382,403 3,115,281,865 DECENTRALISE FACILITY FINANCING (OFF) 5 3,279,855,405 2,821,913,950 FIXED ASSETS 1 259,906,955 259,906,955 9,584,029,356 7,189,895,577 CURRENT ASSETS CASH AND BANK BALANCES 6a 1Z99212241 UZQ?81 028 11,284,241,567 10,166,176,605 GRANTS & LIABILITIES GRANT/VOTE FROM WORLD BANK & OTHERS 8 9,757,805,700 8,689,245,551 OTHER INCOME 7 1 07 21 11 28412921 101606139 CURRENT LIABILITIES Total Current Liabilities 6b 128,646 140,466 11,284,241,567 10,166,176,605 PROJECT Man ger RE PORT I NG AU D I TOR HEAD PFMU 6 NIGERIA STATE HEALTH INVESTMENT PROJECT CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER, 2019 2019 2018 CASHFLOW FROM OPERATING ACTIVITIES 1,526,307,221 1,476,790,588 Operating Development Expenditure 766,610,274 560,980,334 Operating Development Capital Expenditure 1,005,274,319 431,312,473 Grant to Ministries 4,272,382,403 3,115,281,865 Grant to Local Government 3,279,855,405 2,821,913,950 9,324,122,401 6,929,988,623 Net Cashflow from Operations (7,797,815,180) (5,453,198,035) CHANGES IN OPERATING ASSESTS/LIABILITIES Creditors 128,646 140,466 CASHFLOW FROM INVESTING ACTIVITIES Purcahse of Fixed Assets (259,906,955) (259,906,955) Staff Advances Net cash inflow From Investing Activities (259,906,955) (259,906,955) CASHFLOW FROM FINANCING ACTIVITIES IDA CREDIT 9,757,269,676 8,688,709,527 FUNDING FROM STATE GOVERNMENT 536,024 536,024 9,757,805,700 8,689,245,551 CASH AND BANK BALANCES AS AT 31/12/18 1,700,212,211 2,976,281,027 7 NIGERIA STATE HEALTH INVESTMENT PROJECT REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2019 NOTES TO THE FINANCIAL STATEMENTS STATEMENT OF SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS The preparation of the financial statements is in conformity with IAS & Local GAAP which requires management to make judgments, estimates and assumptions that affect the reported amounts of assests, liabilities and contingent liabilities at the date of financial statements and reported amount of grants and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates. In particular, information about significant areas of estimation and uncertainty considered by Management in preparing the financial statements are described below. 1. CORPORATE INFORMATION The financial Statements of World-Bank Assisted Nigeria State Health Investment Project for the year ended 31 December 2018 were authorised for issue in accordance with requirement of the bank 31st May 2019. 2. BASIS OF PREPARATION The financial statements have been prepared in accordance with the International Accounting Standard (IAS) and Generally Accepted Accounting Standards (GAAS) as issued by the International Accounting Standard Board (IASB) as adopted by Financial Reporting Council of Nigeria. The financial statements have been prepared on a historical cost and Cash basis and all values are rounded to the nearest Naira and kobo except where otherwise indicated. a. Depreciation No provisions for Depreciation of Fixed Assets to write off the costs. All fixed assets are stated at cost. They are assets intended for use over a period exceeding one accounting year and whose value per unit is not below N5,000. Any assets irrespective of uint costs below N5,000 are classified as 'Special Project'. b. Receivables Receivables are stated based on actual cash received from the donors. c. Repairs and Renewals All repairs and renewals are written-off as expenditure when incurred. d. Foreign Currency Transactions in foreign currency($) were transalted into naira at the appropriate rate of exchnage ruling at the transaction date. Balances in foreign currency are translated into Naira at the ruling exchnage rate at the Balance Sheet date. Gains/Losses arising on Foreign Currency convertion are credited to/charged against income/reserves. 8 NIGERIA STATE HEALTH INVESTMENT PROJECT (NSHIP) REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2019 NOTES TO THE FINANCIAL STATEMENTS (CONT'D) 1 FIXED ASSETS 2019 2018 N N COMPUTER 27,094,656,71 27,094,656.71 MEDICAL EQUIPMENT 10,000,000,00 10,000,000.00 PROJECT MOTOR VEHICLES 155,017,331.46 155,017,331.46 PROJECT GENERATOR 6,582,400.00 6,582,400.00 FURNITURES & FITTINGS 7,421,150,00 7,421,150.00 OFFICE EQUIPMENT 53,791,416.38 53,791,416.38 259,906,954.55 259,906,954.55 2019 2018 2. OPERATING EXPENDITURE N N Bank Charges 4,555,323.98 2,827,916.24 Transport and Per Diem Honorarium 66,499,373.92 83,272,493.17 Maintenance of Vehicles 17,631,947.60 12,133,877.00 Maintenance of Office Building 20,125,796.61 16,071,195.61 Local Transport and Travels 34,856,553.88 33,761,101.08 Telephone Expenses 1,650,000.00 1,170,000.00 Printing and Stationery 69,021,236.28 51,567,900.73 Fumigation/Office Toiletries 14,000.00 0.00 Advert Publlicity and Media Expenses 22,554,314.72 3,292,091.03 Maintenance of Office Equipment 3,351,380.92 1,285,769.06 Internet Subscription 10,442,500.00 4,727,500,00 Fueling and Maintenance of Gen Set 3,284,047.00 1,346,852.00 Office Security 5,215,000.00 3,260,560.00 Staff Salaries and Allowances 122,502,164.84 92,889,610.16 Postage Courier 52,400.00 52,400,00 World Bank Mission 5,067,075.00 5,067,075.00 Utility Bills 5,463,486.94 5,253,144.61 Sundry Office Items 5,083,504.16 2,278,378.64 Insurance of Project Vehicles 4,748,000.00 4,748,000.00 Cable Satelite Subscription 962,160.00 726,960.00 Servicing of Other Meetings 21,353,917,72 12,342,934.76 Purchase of Newspapers & Magazine! 55,250.00 0.00 Financial Mgt Coaching, Supervision a 17,810,701.43 8,081,047.43 Supportive Supervision/Quantity Verii 66,825,114.00 20,717,214.00 Local Training fees, Transport & Per D 36,998,470.90 29,349,788.16 Foreign Training Fees, Transport and I 30,128,854.34 30,128,854.34 SPFMU (State Project Finance MGT Ui 20,744,525.00 7,841,900,00 NSHIP Consultant Accommodation Ex 26,437,642.00 24,492,000.00 Construction/Renovation of Office 3,329,887.71 3,329,887.71 Construction/Renovation of Office 12,555,065.53 996,780.00 9 Fuelling of Vehicle 3,237,450.00 2,797,550.00 Transfer of Fund to Ministry of Health 14,330,000.00 14,330,000.00 Course Fee 500,000.00 500,000.00 Internet Infrastructure 2,417,568.00 3,227,568.00 Office Support Equipment 2,225,684.80 72,000.00 Demand Side Financing (DSF) 25,756,074.00 25,756,074,00 Reimbursable Imprest 1,227,670.00 705,650.00 Quantity & Quality Counter Verificati 14,413,200.00 7,987,500.00 Steering Committee Meeting 6,363,050.00 4,789,050.00 Technical Working Group Meeting 5,826,600.00 2,570,000.00 Urban PBF Activities 5,536,325,00 5,536,325.00 PIU Evaluation/Staff Performance Bor 23,224,525.01 23,224,525.01 Study Tour -1,299,763.52 -1,299,763.52 Maintenance of Office Furniture & Fittings 261,162.70 0.00 Medical Bills & Expenses 76,580.00 0.00 Midterm Review/Impact Evaluation Expenses 23,034,453.15 0.00 Health Care Waste Mgt (HCWM) Expenses 160,000.00 160,000.00 Health Facility ADV Payment (Support 0.00 7,610,625.00 766.610.273.62 560.980.334.22 2019 2018 3. DEVELOPOMENT OF CAPITAL EXPENDITURE N N RESULT BASED APPROACH - TRAINING 509,974,538.54 304,170,332.58 RESULT BASED APPROACH - CONSULTANCY 433,628,050.91 127,642,140.77 RESULT BASED APPROACH - GOODS 61,671,730.04 0.00 1.005.274,319.49 431,812.473.35 4. PERFORMANCE BASED FACILITY FINANCING (PBFF) N Ile Oluji/Okeigbo LGA PBF Health Fac 377,232,825.00 280,037,594.00 PBF Health Fac. LGA Akoko South East LGA 244,833,010.00 198,007,113.00 PBF Health Fac. Akoko South West LGA 575,358,652.00 458,100,080.00 PBF Health Fac. Akoko North West LGA 479,060,581.55 227,066,938.00 PBF Health Fac. Ese-Odo LGA 405,955,756.03 115,472,881.00 PBF Health Fac. Ifedore LGA 238,118,43800 85,749,415.00 PBF Health Fac. Ondo East 138,450,657.00 98,505,525.00 PBF Health Fac, Ondo West LGA 225,150,065.00 132,988,242.00 PBF Health Fac. Owo LGA 239,542,887.00 140,148,382.00 PBF HMB 62,462,264.00 3,223,750.00 PBF Supp. Fund Ile Oluji/Okeigbo LGA 165,244,951.46 109,846,865.00 PBF Supp. Fund Ondo West LGA 307,663,288.00 198,062,295.00 PBF Supp. Fund Owo LGA 37,217,000.00 135,697,404.00 PBF Supp. Fund Ifedore LGA 31,638,500.00 219,018,976.00 PBF Supp. Fund Ese Odo LGA 23,643,000.00 84,264,735.00 PBF Supp. Fund Akoko South East LGA 35,673,600 25,953,000 PBF Supp. Fund Akoko South West LGA 119,439,605.00 96,956,105.00 PBF Supp. Fund Akoko North West LGA 42,242,875,00 21,215,875,00 PBF Supp. Fund Ondo East LGA 24,661,500.00 13,131,000.00 Urban PBF (Subsidies & Support Fund) Ondo West LGA 43,883,945.00 27,874,647.00 10 lie Oluji/Okeigbo LGA PBF Health Fac 0 19,808,000 Ondo West Health Facilities 0 87,408,490 Owo LGA Health Facilities 0 15,120,500 Ifedore LGA Health Facilities 0.00 12,489,500.00 Ese-Odo LGA Health Facilities 0 5,970,000.00 DFF LGA PHC Dept Ilaje 42,918,316 10,074,258 PBF LGA PHC Dept Akoko South East 47,850,721 14,765,208 PBF LGA PHC Dept Ondo West 16,591,439.00 16,591,439.00 PBF LGA PHC Dept Owo 14,427,113.00 14,427,113.00 PBF LGA PHC Dept Akoko North West 13,465,951,00 13,465,951.00 PBF LGA PHC Dept Ese Odo 12,617,470.00 12,617,470.00 PBF LGA PHC Dept Ifedore 14,588,262,00 14,588,262.00 PBF LGA PHC Dept Akoko South West 12,811,689.00 12,811,689.00 DFF LGA PHC Dept Ose 14,765,208,15 14,845,675.00 DFF LGA PHC Dept Odigbo 19,506,433.00 19,506,433.00 LGA PHC Dept - lie Oluji/Okeigbo 62,754,411,86 10,147,835.00 DFF LGA PHC Dept Akure South 16,902,336.00 16,902,336.00 DFF LGA PHC Dept Akure North East 14,316,396.00 14,316,396.00 DFF LGA PHC Dept Akure North 17,894,559.00 17,894,559.00 LGA PHC Dept - Ondo East 16,291,508.32 27,012,563.00 DFF LGA PHC Dept Irele 14,089,114.00 14,089,114,00 DFF LGA PHC Dept Okitipupa 20,083,303.00 20,083,303.00 DFF LGA PHC Dept Idanre 24,493,009.00 24,493,009.00 Hospital Mgt Board 58541763 931,40 5. DECENTRALISE FACILITY FINANCING (DFF) N N DFF (Support Fund) Idanre LGA 65,264,288.84 28,562,311,00 DFF (Support Fund) Akure North LGA 53,069,465 24,840,179 DFF (Support Fund) Akure South LGA 70,279,867 28,245,844 DFF (Support Fund) Ilaje LGA 98,866,382 29,253,021 DFF (Support Fund) Okitipupa LGA 86,226,930 29,760,004 DFF (Support Fund) Akoko North East LGA 67,612,564 33,042,891 DFF (Support Fund) Odigbo LGA 69,373,515 9,999,746 DFF (Support Fund) Irele LGA 50,146,742 22,599,242 DFF (Support Fund) Ose LGA 62,349,464 11,816,328 DFF Subsidies Akure South LGA 264,115,954 204,838,892 DFF Subsidies Ose LGA 116,964,317 116,964,317 DFF Subsidies Odigbo LGA 116,590,077 116,590,077 DFF Subsidies Akure North LGA 97,803,382 97,803,382 DFF Subsidies Okitipupa LGA 160,329,058 160,329,058 DFF Subsidies Akoko North East 118,803,219 118,803,219 DFF Subsidies Idanre LGA 87,105,480 87,105,480 DFF Subsidy Irele LGA 110,731,548 110,731,548 DFF Subsidies Ilaje LGA 200,518,955 200,518,955 Akure North LGA DFF Health Facilities 0 8,991,000 Akure South LGA DFF Health Facilities 0 8,883,950 11 Odigbo LGA DFF Health Facilities O 8,478,676 Ose LGA DFF Health Facilities 0 8,155,750 Ondo East PHC 0 3,200,000 DLI Ondo State LGA 1,352,251,730 1,352,251,730 Monitoring & Evaluation 3 467 3,279,855,405 2,821,913,950 12 NIGERIA STATE HEALTH INVESTMENT PROJECT (NSHIP) REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2019 NOTES TO THE FINANCIAL STATEMENTS (CONT'D) 6a. CURRENT ASSETS 2019 2018 CASH AND BANK BALANCES N N SPECIAL ACCOUNT 1,681,639,596 2,956,632,425 DRAW-DOWN ACCOUNT (3,828,040) (708,170) INTEREST DOMICILIARY ACCOUNT 22,400,655 20,356,773 1,700,212,211 2,976,281,028 OTHER DEBTOR - STAFF ADVANCES CURRENT LIABILITIES N DRAW DOWN ACCOUNT 6b Creditors 128,646 140,466 128,646 140,466 NB: Bank Charges on unoperated Draw down acct 7. OTHER INCOME N N INTEREST RECEIVED FROM DOLLAR ACCT 19,693,285 11,023,907 MISCELLANEOUS RECEIPTS 90,000 90,000 EXCHANGE GAIN FROM DOLLAR ACCOUNT 1,504,839,391 1,463,992,136 INTERST RECEIVED FROM NAIRA BANK ACCOUNT 1,684,545 1,684,545 1,526,307,221 1,476,790,588 8. FUNDING SUMMARY N N IDA CREDIT 9,757,269,676 8,688,709,527 STATE GOVERNMENT CONTRIBUTION 536,024 536,024 9,757,805,700 8,689,245,551 13 I NIGERIA STATE HEALTH INVESTMENT PROJECT SPECIAL ACCOUNT (5090397079) RECONCILIATION STATEMENT FOR THE MONTH OF DECEMBER, 2019 USD($) Balance as per Cash Book 5,338,538 Add/Deduct 4,186 Balance Per Bank Statement 5,334,352 14