1 1 1 1 1 1 1 1 AUDIT Of FIN CIAL STAT 1 LABOUR £NSIXJE PUBLIC Wo TO MITIGATEI 1 £80 PACT PROJECT FOR TH£ PEIRIOD 1 J UARYTO 30APRIL2017 1 1 1 1 1 1 1 /Y. '4'., 1 1 1 1 I Government ofSra Leone NationalCommission for Soci/Action Labour Intensiva Public Work to Mitigate Eboa Impact Project GroanthN. )TAMI23 RoMIC/BStatemnt for the period IJkanary to 3g April ZI7 Contents Page General Information 1 The Background of the Project 2-3 Statement of Management's Responsibilities 4 Report of the Auditors 5-6 Statement of Resources and Expenditure 7 Statement of Comprehensive Income 8 Statement of Financial Position 9 Notes to the Financial Statements 10-13 Report of the Auditors on the Special Account 14 Special Account Statement 15 I I I I I PIT sovernment of Sierra Leone Hot7ioflCommission for Socia/Actin Labour latensive Pubi1c Work to Mityste ho/a Impact Project grant &o 7FA49IIZ3 Fnan0cIal Statement for the period January to 311 Apr/ 29/7 GENERAL INFORMATION Official Address 12/14 Charlotte Street Freetown Sierra Leone Commissioner Mr. Alie Barbara Mansaray Mrs. Isatu Kamara (Deputy) I Bankers Rokel Commercial Bank Siaka Steven Street, Freetown Auditors Audit Service Sierra Leone 2nd Floor, Lotto Building Tower Hill Freetown Sierra Leone I I1 I I ovErnmt ofSirra Leoe, NatonalCommission for SocialAction Labour IntensIve Public Work to Mitiyate Ehol Impact Froject Grrant No. IFAI123 Financial Statement For the periodIJanuaryto 30April 29)7 Background Information on the project: The Government of Sierra Leone through the National Commission for Social Action (NaCSA) has applied for and received a Grant of US 2,950,000 from the World Bank towards the cost of LIPW. The project will finance a package of cash transfers to 12,000 extremely poor households in the country. The Project Development Objective is to provide temporary employment to youth in poor households to help mitigate the socioeconomic impact of the EVD outbreak in Sierra Leone. I The project beneficiaries: I The project will directly benefit 12,000 youths, defined in Sierra Leone as those between the age of 15 and 35. The project will target youth in poor households, giving priority to those directly affected by Ebola. At least 30 percent of the project beneficiaries would be female, which is in line with the trends in gender participation in the existing LIPW program under YESP. Before the (EVD) outbreak, the Country was making important strides in establishing a social protection (SP) system capable of protecting vulnerable groups such as youth from shocks. In 2011, the government with the support of the World Bank and the United Nations Children's Fund (UNICEF), launched an SP Assessment to guide the development of an improved SP system. The assessment recommended that the government should focus on three main programs including Labour intensive Public works (LIPW) for youth in poor households and on establishing robust systems to increase the cost effectiveness and improve coordination between actors implementing SP and related programs. The LIPW is at the centre of all the government's efforts to build a coherent SP system capable of expanding in periods of emergencies. The project Development Objective (PDO) is to provide temporary employment to youths in poor households to help mitigate the socioeconomic impact of the EVD outbreak in Sierra Leone. Beneficiaries: The project will directly benefit 12,000 youths defined in Sierra Leone as those between the ages of 15 and 35. The project will target youths in poor households, giving priority to those directly and indirectly affected by the Ebola. I The project The project has three components I1) Labour Intensive public Works (US$ 2.3 Million): The objective of this component would be to provide temporary employment for youths in poor households through labour intensive public works subprojects. Approximately 12,000 youths are expected to participate in the LIPW. The LIPW project will finance payment of wages for unskilled labour and creation of priority community infrastructure, including feeder road rehabilitation or maintenance and community agricultural projects. The subprojects would be implemented using a community driven approach and taking into account seasonality to coincide with the lean season when the need for safety net assistance is high. This components would finance the transfers to public works beneficiaries and the cost of materials and other Administrative costs incurred by the Communities in the implementation of the subprojects. Approximately 2 yGoverfment of Sisrra Lone NationI/Commission for Soc/a/Action Labour ltensive Pblc Work to Maitigat Ebola Impact Project irant Ho. TFAI/I23 Finefcial Statemot Fr th pereiod Idaoary to 30April 2517 Background Information on the project (Continues) 150 subprojects are expected to be supported under the project, with each subproject designed to accommodate up to 80 workers. Eligible beneficiaries would be entitled to work between 50 and 75 days depending on the design requirements of each subproject and would receive a transfer amount of Lel0,000 ( equivalent to US$2) for each days of work I 2) System Development (US$0.3 Million): The objective of this component would be to support development of systems for targeting enrolment, payments and grievance redress to identify beneficiaries, track days worked and ensure that transfers reach the intended beneficiaries. This component would finance scale up of key SP system for LIPW notably: (1) common targeting mechanism; (2) Electronic systems for registration, attendance, verification and payments, and (3) independent anti corruption and monitoring measures. 3) Project Management component (US$ 0.35): The objective of this component would be to support efficient project implementation. Specifically , the component would finance routine project management for the implementation of the public works subprojects and staff and operational costs related to supervision of the public works subprojects and delivery of each cash transfer to public works beneficiaries, including the following activities: (1) information, education and communication ( IEC)(2) M&E activities; (3) recurrent operational costs, including regional and district level supervision and implementation support; and (4) fiduciary aspects. I I I I I I I 3 I P'T G89oromedt of Sierra Leong Nationa/Commission for SocIa/Actlil Labour Intensive Public Wrk to Mitigate Ebol Impact Project Grant No. TFAI2 Financis Statement For the period/January to 30April 27 STATEMENT OF MANAGEMENT'S RESPONSIBILITIES It is the responsibility of management to prepare Financial Statements for each financial year which should show a true and fair view of the state of affairs of the Project and of its surplus or deficit for that year. In preparing these Financial Statements the Management is required to: I* select suitable accounting policies and apply them consistently; * make judgments and estimates that are reasonable and prudent; * state whether applicable accounting policies have been followed, subject to any material I departures disclosed and explained in the Financial Statement; * prepare the Financial Statements on a going concern basis unless it is inappropriate to presume that the Project will continue its activities I Management is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Project. They have a general responsibility for such steps as are reasonably available to them to safeguard the assets of the Project and to prevent and detect fraud and other irregularities. On behalf of Management ...... ...... ..... ........t. The Commissioner I.. Seni Director Support Services I I I 4 9Gornment of Sirruo lona NationCalcommission for SOciAction labour Intensive PubliC Work to Mitigate Ebo/a Impact Project GrantNo. TFAl!923 HinsncialStatement for th periodIJonuary to 31YAprl217 REPORT OF THE AUDITORS - AUDIT SERVICE SIERRA LEONE TO THE GOVERNMNEMT OF SIERRA LEONE II have audited the accompanying Financial Statements of Labour Intensive Public Work to Mitigate Ebola Impact Project, International Development Bank (IDA) Grant Number: TFA01023 which is comprised of a separate statement of the financial position as at 30th April 2017, a separate statement of comprehensive income for the period 1t January 2017 to 30h April 2017, a statement of resources and expenditure for the period 1st January 2017 to 30th April 2017 and a summary of significant accounting policies and other explanatory notes as set out on pages 10 to 12. Responsibility of Management The responsibility for the prevention of fraud and error and other irregularities rests with the Management of the Project. I Other responsibilities include: * designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; I selecting and applying appropriate accounting policies; and * making accounting estimates that are reasonable in the circumstances. Responsibility of the Auditor General The Financial Statements of the Commission are subject to audit by the Auditor General in accordance with section 119(2) of the Constitution of the Republic of Sierra Leone, 1991. My responsibility is to express an opinion on these financial statements based on my audit. The audit was conducted in accordance with the International Standards of Supreme Audit Institutions. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance 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, I 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 controls relevant to the project preparation and fair presentation of the financial 5 bovroment of Siefra Leone Hktional Commission for SOciSlAction Labour ltenslye Public Work to Mitigatr hol Impact Project Grant No. TFAMIZ.3 RfancialStatement For the poiod / January to 3. April ZIf/ 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 project internal controls. An audit also includes evaluating the: * appropriateness of accounting policies used; reasonableness of accounting estimates made by management; * overall presentation of the financial statements; and adequacy of design and the effective implementation of internal controls. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Unqualified Opinion In my opinion the financial statements of Labour Intensive Public Work to Mitigate Ebola Impact Project give a true and fair view, in all material respects, of the financial position as at 30th April 2017 and its financial performance for the period 1t January 2017 to 31th April 2017. I AUDITOR GENERAL Date & 4U11 6 6 Fovernmant of Siera Leone Nothonal Commission for Socia/Action Labour Intensive Public Work to Mitigate bo/a Impact Project GrUfft Ho. 7FA91IA3 ffanci/alStatemnt For the periodI January to 3 April 217 STATEMENT OF RESOURCES AND EXPENDITURE 12 months 4 months to to 31 30th April December 19 Months Notes 2017 2016 Cumulative Us $ Us $ Us $ Resources Opening Balance 473,307 (362,681) - Cash received from IDA 4b 212,495 2,185,515 2,398,010 I Direct Payment IDA 4b - 278,951 278,951 Bank Interest 145 777 922 685,947 2,102,562 2,677,883 I Expenditures Component I Cash Transfer 5a 39,291 1,016,396 1,188,531 Component 2 Development of System 5b (9,395) 530,407 749,787 Component 3 Project Management 5c 208,750 82,452 292,264 238,646 1,629,255 2,230,582 I Surplus/(Deficit) 447,301 473,307 447,301 I Represented by: Cash and cash equivalents 7 447,301 473307 473,307 447,301 473,307 447,301 I I I I Bo0ernment of Sirrm Len NotionalCommission for Socis/Actiw Lahour Intensive Public Work to mitifate Ebola Impact Project Financial Statfmlt For i period / January to 31April 2/7 STATEMENT OF COMPREHENSIVE INCOME 12 months 4 months to to 31 30th April December 2017 2016 Us $ Us $ Income Notes Funding released from deferred income 3 238,646 1,629,255 238,646 1,629,255 Expenditure Component 1 Cash Transfer 5a 39,291 1,016,396 Component 2 Development of System 5b (9,395) 530,407 I Component 3 Project Management Sc 208,750 82,452 238,646 1,629,255 Result for the period 0 (0) These Financial Stateme ts were approved on........................................................ 2017 I..............TheCommissioner .......... ................. ............................ The Senior Director Support Services 8 drovernmot ofSenr* Looffe HaOnHl Commission for Soci/Action Labour Intensive Pubir Work to Mitigate hoa Impact Project grant No. TFA9I23 fiascialStatement For th periodlJowuary to 30 April2/7 STATEMENT OF FINANCIAL POSITION 12 months 4 months to to 31 30th April December 2017 2016 Us $ Us $ Assets Cash and cash equivalents 447,301 473,307 447,301 473,307 Equity & Liabilities Deferred Income 447,301 473,307 447,301 473,307 I I I These Financial Stateme ts were approved on........... ..........................................2017 I.......................................... ............. ....... The Commissioner ................................ .......... . . The Senior director Support Services I I 9 overment ofSir Lesn otion/alCommission for SocialAtlon Labour lntensive Public Work to MgsteEbulk Impact Project Graot A. TFA91923 Fnsati/lStatement For theparlodlanuaryto 3.Aprl/217 NOTES TO THE FINANCIAL STATEMENTS 1. REPORTING PROJECT I The Government of Sierra Leone through the National Commission for Social Action (NaCSA) has applied for and received a Grant of US 2,950,000 from the World Bank towards the cost of LIPW. I The project will finance a package of cash transfers to 12,000 extremely poor households in the country. The Project Development Objective is to provide temporary employment to youth in poor households to help mitigate the socioeconomic impact of the EVD outbreak in Sierra Leone. I 2. PRINCIPAL ACCOUNTING POLICIES The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Project's financial statement. a. Basis of accounting Statement of resources and expenditure are prepared on the basis of cash accounting whereby income is recognized on the receipt of cash and cash equivalents. Expenses recognized on the disbursement of cash and cash equivalents. The basis of income recognition is described in note (d) below. b. Foreign currency transaction Functional and presentation currency The functional currency is the local currency in Sierra Leone which is the Leone. The Project has however adopted the United States Dollars (US$) as its presentation currency as most of it transactions are dominated in US Dollars. Transactions in all other currencies are therefore considered foreign currency transactions. I I I 10 rnramenlt of Sierra Leone NatlnelCommission for SocialAction Labour Intensive Public Work toM tyetetEol Import P*oject grant No. IF4lll73 Finacial Statement for the periodlJoanary to 3 April 217 NOTES TO THE FINANCIAL STATEMENTS (Continued) Transactions and balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing on the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions denominated in foreign currencies are recognized in the Project's Statement of Comprehensive Income. c. Non-current assets Plant and equipment are expensed on acquisition by the Co-ordinating Unit. The financial statements therefore have no non-current assets shown. d. Income Funding from the World Bank is held in a deferred income account when received and only recognized in the Project's Statement of Comprehensive Income when utilised. I I I I I I I 11 arovarnment of Sierra leone Nationul Commission for Social Action Labour Intensive Public Work to Mtiyate Ebola Impact Project rVnt N. TFA1/923 flali/cal Statement For the periodIJanuary to 301April 217 NOTES TO THE FINANCIAL STATEMENTS (Continued) 12 months 4 months to to 31 30th April December 2017 2016 Us $ US$ 3 Deferred income/Expense Opening Balance 473,307 (362,681) Cash received from IDA 212,495 2,185,515 Direct payment to beneficiaries - 278,951 1 Bank Interest 145 777 Release to Income statement (238,646) (1,629,255) 447,301 473,307 Represented By: I Cash & Bank 447,301 473,307 Advances from other Projects - - Balance as at 31 December 447,301 473,307 I 4a. Disbursement I Total Grants Receivable 485,534 2,950,000 Amount Disbursed (212,495) (2,464,466) Amount yet to be disbursed 273,039 485,534 4b Disbursement During the year LIPW 01 - Direct - 160,426 LIPW 02 - Direct - 118,525 I LIPW 04 - Special Account - 123,479 LIPW 05a - Special Account - 2,062,036 LIPW 08 - Special Account 212,495 - 212,495 2,464,466 12 Governmet of Sirraoeone NationalCommission for Socid1 Action Labour Intensive Public Work to Mtigate Ehola Impact Proect Grant No. TFAl123 Financial StatOment Far tho periodIJanuary to *0 April 2017 NOTES TO THE FMANCIAL STATEMENTS 12 months 4 months to to 31 30th April December 2017 2016 us $ us $ 5a I Component 1 Cash transfer to beneficiaries 39,291 1,016,396 39,291 1,016,396 5b Component 2 COC Administration (46,662) 463,897 payment to service provider ( Splash) 37,267 66,510 (9,395) 530,407 5c Component 3 I Operating costs 3,943 40,364 ACC/ GRM 1,627 14,713 Staff Salaries - 9,900 Monitoring and Evaluation 1,290 9,975 Goods 201,890 7,500 208,750 82,452 I 6. Cash and Bank Special Account 445,595.00 473307 Cash - in Transit 1,706.00 - 447,301 473,307 I 13 Iovrnmet of Serra Leone NotinlCommission for Socia/Action Labour Intensive Public Iork to Mitirate ho/a impact Project Srult No. 7FAlll23 fiaflcial Statement For the periodlJanuary to 30April 2017 REPORT OF THE AUDITORS ON THE SPECIAL ACCOUNT STATEMENT, US DOLLLAR ACCOUNT NUMBER 17-011773091-01 I have audited the accompanying Special Account numbered 17-011773091-01 established under the provision of the IDA Project for the 4 months period ended 30th April 2017 as set out on page 15. I conducted the audit in accordance with the Standards of the International Organization of Supreme Audit Institutions (INTOSAI) and International Federation of Accountants (IFAC). Those Standards require that I plan and perform the audit to obtain reasonable assurance that the Special Account statements are free from material misstatement. The accompanying Special Account Statement was prepared on the basis of cash deposited and withdrawals for the purpose of complying with the project agreement. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Opinion In my opinion the receipts are properly accounted for and the withdrawals were made for the purpose of the project in accordance with the Loan/Grant agreement and IDA disbursement procedures. The accompanying special account statement give a true and fair view of the ending balance for the four months period ending 30dApril 2017. In accordance with the provisions of the terms of reference of the audit, I confirm as follows: * Withdrawals from the Special Account during the period under review were made for eligible expenditure. * The Special Account of the project has been maintained in accordance with the provisions of the financing agreement. 19ur AUDITOR GENERAL e-1 ' ' i I Datee 14 overnment of Sierra Leone H8onlcommission for Soci/Actio, Labour Intensive Public Work to Mgate hoe Impact Project Grafft No. TF All!23 financial Statement for the perodIJanuary to 30April 27 SPECIAL ACCOUNT STATEMENT, US DOLLAR ACCOUNT NUMBER 17-011773091-01 Account No: 17-011773091-01 Depository Bank Rokel Commercial (Sierra Leone) Bank Address Siaka Stevens Street, Freetown Grant Number TFAO 1023 Currency United States Dollars 2017 I$ Opening Balance 473,307 Replenishment 212,495 Bank Interest 145 Refund 46,662 Project Payments (285,308) Closing Balance 447,301 I I I I I I I 15 I