SSUJCT LAS QUOTE N DCG.77/349/01/2018 I11h December, 2018 The Rt. Hon. Speaker of Parliament Parliament of Uganda Kampala REPORTOF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF AGRICULTURE CLUSTER DEVELOPMENT PROJECT (ACDP) FOR THE YEAR ENDED 30TH JUNE, 2018 In accordance with Article 163 (4) of the Constitution, I forward herewith audited financial statements of Agriculture Cluster Development Project for the year ended 30th June, 2018 together with m re ort and opinion thereon. John F.S. Muwanga AUDITOR GENERAL Copy to: The Permanent Secretary/Secretary to the Treasury The Permanent Secretary, Ministry of Agriculture, Animal Industry and Fisheries The IDA/World Bank The Project Coordinator, Agriculture Cluster Development Project SCANNED Member of the international Organisation of Supreme Audit Institutions (INTOSAI) THE REPUBLIC OF UGANDA REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF AGRICULTURE CLUSTER DEVELOPMENT (ACDP) FOR THE YEAR ENDED 30T" JUNE 2018 OFFICE OF THE AUDITOR GENERAL UGANDA TABLE OF CONTENTS LIST O F A C R O N Y M S ............................................................................................................................................ 2 REPORT-OF-THE-AUDITOTRGENERACO NTHEFIANCIASTATEFfENTSOFAGRICULTURE CLUSTER DEVELOPMENT PROJECT (ACDP) FOR THE YEAR ENDED 30TH JUNE, 2018..............................................3 O p in io n ..................................................................................................................................................................3 8B a sis o f O p in io n n ........................................................................................................................ ........................... 3 K ey A ud it M a tte rs ................................................................................................................................................. 4 Implementation of Budget approved by Parliament ..............................................................................4 O the r Info rm a tio n ........ ........................................................................................................................................6 Responsibilities of the Accounting Officer for the Financial Statements.....................................................6 Auditor's Responsibilities for the Audit of the Financial Statements ...........................................................7 O ther Reporting R esponsibilities........................................................................................................................ 8 REPORT ON THE AUDIT OF COMPLIANCE WITH LEGISLATION AND AGREEMENTS...............................9 REPORT OF THE AUDITOR GENERAL ON THE SPECIAL ACCOUNT OPERATIONS OF AGRICULTURE CLUSTER DEVELOPMENT PROJECT (ACDP) FOR THE YEAR ENDED 30TH JUNE, 2018.........................10 LIST OF ACRONYMS Acronym Meaning (ACDP -Agriculture-Cluster-Development- Project - - -- ATAAS Agricultural Technology and Agribusiness Advisory Services AWMIS Agricultural Water Management Information System CMSP Cluster Multi-Stakeholder Platform CR Credit DCT District Coordination Teams EVMS Electronic Voucher Management System FYR Financial Year GIS Geographic Information System GoU Government of Uganda ICT Information and communications technology IDA International Development Association IESBA International Ethics Standards Board for Accountants ISA International Standards on Auditing ISSAls International Standards of Supreme Audit Institutions MAAIF Ministry of Agriculture, Animal Industry and Fisheries MOFPED Ministry of Finance, Planning and Economic Development MTR Mid Term Review NAADS National Agricultural Advisory Services NARO National Agricultural Research Organisation NAROSEC National Agricultural Research Organisation Secretariat. PSC Project Steering Committee PTC Project Technical Committee RT.HON Right Honourable UGX Uganda Shillings URA Uganda Revenue Authority US $ United States Dollar WB World Bank 2 REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF AGRICULTURE CLUSTER DEVELOPMENT PROJECT (ACDP) FOR THE YEAR ENDED 30TH JUNE, 2018 THE RT. HON. SPEAKER OF PARLIAMENT REPORT ON THE FINANCIAL STATEMENTS Oinion I have audited the accompanying financial statements of The Agriculture Cluster Development Project for the year ended 30th June 2018. The financial statements set out on pages 5 to 13 comprise of; * Statement of receipts and payments * Statement of fund balance * Statement of cash flows * Statement of special designated account activity * Notes to the financial statements including a summary of accounting policies used. In my opinion, the project financial statements present fairly in all material respects the financial performance of the Agriculture Cluster Development Project for the year ended 30th June 2018 and the receipts and payments for the period then ended in accordance with the IDA guidelines and the basis of accounting described under note 1 to the financial statements. Basis of Opinion I conducted my audit in accordance with International Standards of Supreme Audit Institutions (ISSAIs). My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statement's section of my report. I am independent of the project in accordance with the Constitution of the Republic of Uganda (1995) as amended, the National Audit Act, 2008, the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B) (IESBA Code), the International Organization of Supreme Audit Institutions (INTOSAI) Code of Ethics and other independence requirements applicable to performing audits of Financial Statements in Uganda. I have fulfilled my other ethical responsibilities in accordance with the IESBA Code, and in accordance with other ethical requirements applicable to performing audits in Uganda. I believe 3 I advised the Accounting Officer to fast track implementation of the planned activities and provide adequate supervision and monitoring of the project activities being undertaken in order to absorb all funds within the limited timeline. Other Information The Accounting Officer is responsible for the other information. The other information comprises the statement of responsibilities of the Accounting Officer and the commentaries by the Head of Accounts and the Accounting Officer, and other supplementary information. The other information does not include the financial statements and my auditors' report thereon. My opinion on the financial statements does not cover the other information and I do not express an audit opinion or 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 consistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude 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 the Accounting Officer for the Financial Statements Under Article 164 of the Constitution of the Republic of Uganda, 1995 (as amended) and Section 45 of the Public Finance Management Act, 2015, the Accounting Officer is accountable to Parliament for the funds and resources of the Agriculture Cluster Development Project The Accounting Officer is also responsible for the preparation of financial statements in accordance with the requirements of the Public Finance Management Act 2015, IDA guidelines and the basis of accounting described under note 1 to the financial statements., and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error. In preparing the financial statements, the Accounting Officer is responsible for assessing the Project's ability to continue delivering its mandate, disclosing, as applicable, matters related to 6 affecting the delivery of the mandate of the Agriculture Cluster Development Project, and using the IDA Guidelines unless the Accounting Officer has a realistic alternative to the contrary. The Accounting Officer is responsible for overseeing the Project'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 ISSAIs 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. As part of an audit in accordance with ISSAIs, I exercise professional judgment and maintain professional skepticism throughout the audit. I also: * Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. * Obtain an understanding of internal control relevant to the audit 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's internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's ability to deliver its mandate. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on 7 the audit evidence obtained up to the date of my auditor's report. However, future events or conditions may cause the Agriculture Cluster Development Project (ACDP) to fail to deliver its mandate. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. I communicate with the Accounting Officer regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. I also provide the Accounting Officer with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with him/her all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. From the matters communicated with the Accounting Officer, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Other Reporting Responsibilities In accordance with sections 19(1) of the National Audit Act, 2008, I report to you, based on my work described on the audit of Financial Statements, that; * The activities, financial transactions and information reflected in the financial statements that have come to my notice during the audit, are in all material respects, in compliance with the authorities which govern them. 8 REPORT ON THE AUDIT OF COMPLIANCE WITH LEGISLATION AND AGREEMENTS There were no material non-compliance findings that came to my attention during the audit. John F.S. MUwianga AUDITOR GENERAL KAMPALA 11th December, 2018 9 REPORT OF THE AUDITOR GENERAL ON THE SPECIAL ACCOUNT OPERATIONS OF AGRICULTURE CLUSTER DEVELOPMENT PROJECT (ACDP) FOR THE YEAR ENDED 30TH JUNE, 2018 Opinion I have audited the special account statement of the Agriculture Cluster Development Project for the year ended 30th June, 2018 which is set out on page 9 of the financial statements. In my opinion, Project management complied in all material respects with IDA rules and procedures and that the special account statement for the Agriculture Cluster Development Project for the year ended 30th June, 2018 presents fairly in all material respects the account transactions and the closing balance as at 30th June 2018. Management Responsibility for the Special Account Statement Project management is responsible for preparation of the special account statement and its fair presentation in accordance with the requirements of the Government of Uganda regulations and IDA guidelines. Management is also responsible for designing and implementing internal controls relevant to the preparation of the special account statement that is free from material misrepresentation, whether due to fraud or error and selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditor's Responsibility My responsibility is to express an opinion on the special account statement based on my audit. I conducted the audit in accordance with International Standards on Auditing and the IDA guidelines on auditing. Those standards and guidelines require that I plan and perform the audit to obtain reasonable assurance about whether the special account statement is free from material misst ments. I believe that the audit provides a reasonable basis for my opinion. John F. S. Muwanga AUDITOR GENERAL KAMPALA 11th December, 2018 10 MINISTRY OF AGRICULTURAL, ANIMAL INDUSTRY AND FISHERIES (MAAIF) Agricultural Cluster Development Projeet (ACDP) CreditNumber: 5611 O-UG (ACDP) PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED 30THJUNE 2018 2017/2018 J Table of Contents In tro d u ctio n .......................................................... I.......... ........................................................................2 Com ponents of Project ........................................................................................................................... 2 Objectives of the project.......................................................................................................................... 2 Exchange rate .......................................................................................................................................... 2 Budget Performance................................................................................................................................ 2 Commentary on the ACDP Financial Statements by the Head of Accounts ..............................................3 Statement of M anagem ent Responsibilities..............................................................................................4 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACDP)...................................................5 STATEM ENT OF RECEIPTS AND PAYM EN TS..................................................................................5 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACDP)....................................................6 STATEM ENT OF FIN ANCIAL POSITION ..........................................................................................6 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACDP) ....................................................7 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACDP)...................................................8 STATEM ENT OF CA SH FLOW S .......................................................................................................... 8 N OTES TO THE FINANCIAL STATEM ENTS....................................................................................10 2. 0. Notes to accounts ....................................................................................................................... 11 2.1. Note 1: Receipts for the periodon designated account .............................................................11 2.2. N ote 2: Cash Balances in the designated Account:..................................................................11 2.3. Transfers to ACDP Operational Account................................................................................11 2.4. Note 3: Project expenditure ...................................................................................................11 2.5. Note 5: Computation of Foreign Exchange Gain/Loss for the period ending 30'hJune 2018.....12 2.6. Note 4: Purchase of Property, Plant and Equipment..............................................................12 2.7. Statement of Comparison of budget and actual utilization under the main categories under ACDP for the period ending June 30 2018 ........................................................................................13 2.8. Receivables............................................................................................................................ 13 2.9. Currency ................................................................................................................................ 13 1 Introduction The Agriculture Cluster Development Project (ACDP) is a five year Project funded by a loan of USD150, 000,000 from International Development Association (IDA). J During the year, contract was signed on March 22, 2018, for E-Voucher Program, A prototype electronic Voucher Management System (VMS) with United Bank for Africa (UBA). Testing was planned for July 2018. Three manuals were developed and being reviewed and validated - agronomic practices, financial literacy and system use manuals. Inception meetings were held between the UBA Team and the District Local Government (DLG) at district and sub county levels. Another contract was signed February 15, 2018 with Saba Engineering PLC for Pre- feasibility studies for proposed irrigation schemes for priority low land rice in selected districts As part of the publicity about Agriculture Cluster Development Project (ACDP), MAAIF facilitated more than 40 stakeholder engagements, at National, District and Sub county levels, in which more than 4,000 stakeholders were sensitized on ACDP. These included Ministry Departments and Agencies (MDAs), local leaders, technocrats, farmers, Civil Society Organizations, Associations, input and output agro-dealers, amongst others. Components of Project The project comprises of four major components which include (a) Support for Intensification of On-Farm Production, (b) Preparation for Agricultural Water Management Investment, (c) Market Linkages, Post-harvest Handling, Storage and Value Addition, and (d) Project Management, Policy, Regulatory, and ICT Functions of MAAIF. Objectives of the project To raise on farm productivity, production, and marketable volumes of selected Agricultural commodities in specified geographical clusters. Exchange rate For the balance sheet, the ruling rate of 1USD to Ugx 3,874.75 as at 30th June 2018 was applied, an average rate for the period of 1USD to UGX 3,599.43. The spot rate on the date of transfer was used for any receipt. Budget Performance During the year ended 30th June 2018, ACDP budgeted to utilize UGX.60,254,252,400.00 under the main categories of; (a) Support for Intensification of On-Farm Production, (b) Preparation for Agricultural Water Management Investment, (c) Market Linkages, Post-harvest Handling, 2 -J Storage and Value Addition, and (d) Project Management, Policy, Regulatory, and ICT Functions of MAAIF. As at 30th June 2018, UGX 15,698,868,164.21 was utilized representing a 35% Commentary on the ACDP Financial Statements by the Head of Accounts During the period ended 30th June 2018, Agricultural Cluster Development Project (ACDP) had opening balances of USD 5,040,246.00 on designated account and UGX 3,514,393,000.00 on the operational account respectively. Additional USD 6,536,261.00 and was received from IDA during the year. Total funds utilization amounted to UGX 15,698,868,164.21 during the year end June 2018 under the project main categories. The project closed the year with a balance of UGX 2,632,286,562 on UGX Account and USD 7,256,784.67 I take full responsibility for the integrity of these Financial Statements, the financial information they contain and their compliance with the PFMA 2015. Signed on behalf Ministry of Agriculture Animal Industry and Fisheries (ACDP) Ken mr. Assistant Commissioner Accounts j3 Statement of Management Responsibilities The Financial Statements attached herewith have been prepared in accordance with the provisions of the Public Finance and Management Act, 2015 (The Act) and International Public Sector Accounting Standards (IPSAS). The financial statements have been prepared on the Cash Basis of Accounting and comply with the generally accepted accounting practice fort the public sector and the Project Financing Agreement. We are pleased to submit the required financial statements in compliance with the Act and Project Financing Agreement. We have provided, and we will continue to provide all the information and explanations as may be required in connection with these financial statements. J To the best of our knowledge and belief, these financial statements agree with the books of account, which have been properly kept. J We accept responsibility for the integrity of these financial statements, the financial information they contain and their compliance with the terms and conditions of the Loan Agreement and the applicable Government of Uganda Regulations. Signed on behalf Ministry of Agriculture Animal Industry and Fisheries (ACDP Project) Ethel Kamba For .Permanent Secretary I4 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACDP) STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD TO JUNE 30TH 2018 Details Notes Amount in USD EXD Rate Amont (UGX) FY 2017/18 FY 2017/18 Opening Balance ACDP (UGX) 980,058.84 3,585.90 3,514,393,000.00 ACDP (USD) 5,040,246.00 3,585.90 18,073,818,131.40 Total Opening Balance 6,020,304.84 3,585.90 21,588,211,131.40 Add: Receipts IDA Receipts 2.1 6,536,261.00 23,852,048,963.63 Total Funds 12,556,565.84 45,440,260,095.03 Foreign (Loss) / Gain 2.5 1,998,931,758.26 Total available for spending 12,556,565.84 47,439,191,853.29 Less: Total project expenses 2.4 4,361,491.58 3,599.43 15,698,868,164.21 Total 15,698,868,164.21 Cash Balance as at 30th June 2018 31,740,323,689.08 Represented by: ACDP USD A/C 7,256,784.67 3,874.75 28,118,226,400.08 ACDP UGX A/C 679,343.59 3,874.75 2,632,286,562.00 Wrcng Payment for ATAAS from ACDP USD A/C 258,946.00 989,810,727.00 Total Cash Balances . _ 8,195,074.26 31,740,323,689.08 The MAAIF ACDP Financial Statements and the accounting policies and notes set out on pages 10 to 13 form an integral part of these financial statements and were approved by management on 22nd August 2018 and signed on its behalf by: Ethel Kamba Kenneth T.Mugurya For: Permanent Secretary Assistant Commissioner Accounts 5 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACDP) STATEMENT OF FINANCIAL POSITION FOR THE PERIOD ENDING JUNE 30T" 2018 Details FY2017/2018 Current Assets USD UGX Receivables: Refund Wrong Payment for ATAAS from ACDP USD A/C 258,946.00 989,810,727.00 Cash Balances Bank Accounts (designated Account) 7,256,784.67 28,118,226,400.08 Bank Accounts UGX 679,343.59 2,632,286,562.00 J Total Cash Balance as at June 30, 2018 7,936,128.26 30,750,512,962.08 Total Assets 8,195,074.26 31,740,323,689.08 Represented by: Fund Balance - End of June 30 2018 8,195,074.26 31,740,323,689.08 The MAAIF ACDP Financial Statements and the accounting policies and notes set out on pages 10 to 13 form an integral part of these financial statements and were approved by management on 22nd August 2018 and signed on its behalf by: Ethel Kamba Ken .Mug a For: Permanent Secretary Assistant Commissioner Accounts 6 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACDP) STATEMENT OF FUND BALANCE AS AT JUNE 30T" 2018 Details Notes Amount in USD Amount UGX FY 2017/18 FY 2017/18 Opening Balance ACDP (UGX) 980,058.84 3,514,393,000.00 ACDP (USD) 5,040,246.00 18,073,818,131.40 Total 6,020,304.84 21,588,211,131.40 Add: Receipts IDA Receipts 2.1 6,536,261.00 23,852,048,963.63 Sub-total 12,556,565.84 45,440,260,095.03 Foreign (Loss) / Gain 1,998,931,758.26 Total Funds available for spending 12,556,565.84 47,439,191,853.29 Less: Project total expenditure 2.4 4,361,207.70 15,698,868 ,164.21 Balance as at June 30, 2018 8,195,358.14 31,740,323,689.08 Represented by: ACDP(UGX) 679,343.59 2,632,286,562.00 ACDP (USD) 7,256,784.67 28,118,226,400.08 Erroneous Payment for ATAAS from ACDP USD 258,946.00 989,810,727.00 A/C Total Fund Balance 8,195,074.26 31,740,323,689.08 The MAAIF ACDP Financial Statements and the accounting policies and notes set out on pages 10 to 13 form an integral part of these financial statements and were approved by management on 22nd August 2018 and signed on its behalf by: Ethel Kamba Kenne . Mugu a For: Permanent Secretary Assistant Commissioner Accounts a- 7 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACDP) STATEMENT OF CASH FLOWS FOR THE PERIOD ENDING JUNE 30H 2018 Details Notes USD UGX Total Receipts from operating Activities 2.1 6,536,261.00 23,852,048,963.63 Payments for Operating Expenses 2.4 (4,193,494.32) (15,094,174,373.21) Receivables (Payment for ATAAS from ACDP USD A/C) (258,946.00) (989,810,727.00) Exchange Gain/(Loss) 2.5 1,998,931,758.26 Net cash inflows/(outflows) from operating activities 2,083,820.68 9,766,995,621.68 Cash Flows from Investing Activities Purchase of property, plant and equipment 2.6 (167,997.26) 604,693,791.00 Net cash inflows/(outflows) from investing activities (167,997.26) (604,693,791.00) Net increase (decrease) in cash and cash equivalents 1,915,823.42 9,162,301,830.68 Receipts from Financing activities Grants from international organizations Net increase (decrease) in cash and cash equivalents 1,915,823.42 9,162,301,830.68 At the beginning of the Year ACDP (UGX) 980,058.84 3,514,393,000.00 ACDP (USD) 5,040,246.00 18,073,818,131.40 Net ca'h and bank balances at the period end 7,936,128.26 30,750,512,962.08 The MAAIF ACDP Financial Statements and the accounting policies and notes set out on pages 10 to 13 form an integral part of these financial statements and were approved by management on 22nd August 2018 and signed on its behalf by: Ethel Kamba Kenn . Mugum a For: Permanent Secretary Assistant Commissioner Accounts 8 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACDP) STATEMENT OF SPECIAL DESIGNATED ACCOUNT ACTIVITY FOR THE YEAR ENDING JUNE 30TH 2018 Deposit Bank: Bank of Uganda A/C No:000100088400030 Notes FFY 2017/2018 USD Opening Balance at July 17 5,040,246.00 Add: Total Amount deposited by IDA 2.1 6,536,261.00 Deposit By MOFPED - Deposit By GOU TOTAL 11,576,507.00 DEDUCT: Total amount withdrawn: Transfer to project Account 4,000,000.00 Payments directly from the Designated $ account 60,776.33 Erroneous Payment for ATAAS from ACDP USD A/C 258,946.00 Total 4,319,722.33 Closing Balance at June 30, 2018 7,256,784.67 The MAAIF ACDP Financial Statements and the accounting policies and notes set out on pages 10 to 13 form an integral part of these financial statements and were approved by management on 22nd August 2018 and signed on its behalf by: Ethel Kamba Kenn TM a For: Permanent Secretary Assistant Commissioner Accounts 9 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2018 1. Significant accounting policies The principle accounting policies adopted in the preparation of these financial statements are set out below: a) Basis of preparation The financial statements have been prepared in accordance with International Public Sector Accounting standards (IPSAS) with particular emphasis on Cash Basis Financial Reporting under Cash Basis of Accounting. b) Cash Basis of Accounting The cash basis of accounting recognizes transactions and events only when cash (including cash equivalents) is received or paid by the entity. Cash equivalents are defined as short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. c) Foreign Currency Transactions Cash receipts and payments arising from transactions in a foreign currency are recorded in the financial statements using the ruling rate of exchange. Cash balances held in foreign currency are reported using the closing rate. Any gains or losses on foreign currency trar.sactions/balances are dealt with in the Statement of Special/Designated Account Activity. d) Budget The budget is developed on the same accounting basis (Cash basis), same classification basis, and for the same period as for the financial statements. The budget was approved as required by Law and Treasury Regulations as detailed in the Government of Uganda Budget Estimates, e) Reporting Period. The reporting period for this Financial Statement is within the financial year of the Government of the Republic of Uganda which runs from I July 2017 to the 30 June 2018. f) Expenses In general, expenditure is recognized when paid. Expenses relating to liabilities, domestic arrears and any other expenses incurred but not paid are not accrued in the financial statements but provided under the statement of commitments. 10 Other Equipments 277,251,980.00 77,026.71 Total 15,698,868,164.21 4,361,491.58 2.5. Note 5: Computation of Foreign Exchange Gain/Loss for the period ending 30thJune 2018 Details Notes Amount in Amount (UGX) USD FY 2017/18 FY 2017/18 Opening Balance ACDP (UGX) 980,058.84 3,514,393,000.00 ACDP (USD) 5,040,246.00 18,073,818,131.40 Total Opening Balance 6,020,304.84 21,588,211,131.40 Add: Receipts IDA Receipts 2.1 6,536,261.00 23,852,048,963.63 Total available for spending (a) 12,556,565.84 45,440,260,095.03 REPRESENTED BY: Payments during the Financial Year TotJ: project expenses . .. 2.4 4,361,491.58 15,698,868,164.21 Erroneous Payment for ATAAS from ACDP USD A/C 258,946.00 989,810,727.00 Total Payments (b) 4,620,437.58 16,688,678,891.21 b. Cash Balance ACDP USD A/C Balance 7,256,784.67 28,118,226,400.08 ACDP UGXA/C 679,343.59 2,632,286,562.00 Bank Balance Cash Balances 7,936,128.26 30,750,512,962.08 Forex Gain Total,(b+c-a) -.19-31,998,931,758 The year reported foreign exchange gain of UGX 2,000,031,758.05 as indicated in the above schedule due to keenly observing the behavior of the Dollar movement and taking the right decision to exchange at the time when a gain would be realized. The additional resources were used within the project under different activities under ACDP For closing balances, exchange rate as at 30'June 2018 for Bank of Uganda has been used 2.6. Note 4: Purchase of Property, Plant and Equipment Asset UGX ICT Equipment 327,441,811.00 Other Equipments I 277,251,980.00 Total value of property, plant and equipment 604,693,791.00 12 2.7. Statement of Comparison of budget and actual utilization under the main categories under ACDP for the period ending June 30 2018 Activity Budgeted Actual Variance Percentage _J Expenditure Expenditure Utilization Support for Intensification of on-farm Production 17,854,400,000.00 2,771,394,200.00 15,083,005,800.00 15.52% Preparation for Agricultural Water Management Investment 4,875,000,000.00 2,756,856,800.00 2,118,143,200.00 56.55% Market Linkages, Post Harvest Handling, Storage and Value Addition 5,233,845,000.00 3,222,727,605.04 2,011,117,394.96 61.57% Project Management and Coordination at National Cluster District Level 21,585,979,400.00 3,738,680,488.21 17,847,298,911.79 17.32% Capacity Building for Policy and Regulatory functions ofMAAIF 7,098,228,000.00 1,973,285,780.96 5,124,942,219.04 27.80% Developing an ICT-Based Agricultural Information Platform for MAAIF 3,606,800,000.00 1,235,923,290.00 2,370,876,710.00 34.27% Total 60,254,252,400.00 15,698,868,164.21 44,555,384,235.79 26.05% 2.8. Receivables Receivables include the erroneous expense to SABA Engineering amounting to USD 258,946 from the ACDP USD Account. This contract payment should have been paid from ATAAS Account but was erroneously paid from ACDP USD account; however, arrangements have already been made for a refund 2.9. Currency The financial statements are presented in both Uganda shillings (UGX) and US Dollars (USD) The Notes to the accounts form an integral part of these Financial Statements. 13