ENTRO PO Box 27173/1000 Addis Ababa, Ethiopia NILE BASIN INITIATIVE Telephone +251116461130 Fax: +251116459407 INITIATIVE DU BASSIN DU NIL E-mail:etn Web site: wwwaebasin.orentc Ref: ENTRO/0940/2018 Date: December 27, 2018 The World Bank Ethiopia Country Office Addis Ababa, Ethiopia SUBJECT: AUDIT REPORT FOR THE YEAR ENDED JUNE 30, 2018 Kindly, attached herewith please collect ENTRO's Audited Financial Statement for the year ended 30 June 2018 together with the management letter. Should you require further clarifications or have queries we are happy to provide. Sincerely yours, EL SADIG GODA Regional Finance a Admin. Head 2 8 DEC 2018 Enclosure: * Reports and Financial Statements for the year ended 30 June 2018 * Report to MAnament June 30, 2018 ENTRO Is an organ established to Implement the Eastern Nile Subsidlary Action Program wthin the framework of Nile Basin Initiative Egypt, Ethiopia, South Sudan, Sudan I I I I I I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 I I I I I I I 2 8 DEC 2018 I I I I GLOSSARY OF TERMS I AWF Africa Water Facility AfDB African Development Bank BAS Baro - Akobo - Sobat Project CIWA Cooperation in International Waters in Africa ENCOM Eastern Nile Council of Ministers ENSAP Eastern Nile Subsidiary Action Plan ENTRO Eastern Nile Technical Regional Office GIZ The Deutsche Gesellschaft f0r Internationale Zusammenarbeit GmbH IDEN Integrated Development of Eastern Nile N - CORE Nile Cooperation for Results Project NBI Nile Basin Initiative NBTF Nile Basin Trust Fund NELSAP CU Nile Equatorial Lakes Subsidiary Action Program Coordination Unit NEPAD - IPPF NEPAD - Infrastructure Project Preparation Facility Nile SEC Nile Basin Secretariat I 1 I I I I I I I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) REPORTS AND FINANCIAL STATEMENTS TABLE OF CONTENTS Pages OFFICIAL AND PROFESSSIONAL ADVISOR 3 PART 1 ENTRO MANAGEMENT REPORT 1.1 Background 4 1.2 Projects objectives 4-6 PART 2 AUDIT OBJECTIVE, SCOPE, METHODOLODY AND RESULTS 2.1 Audit objectives 6 2.2 Audit scope 6 2.3 Audit methodology 7 2.4 Results of the audit 8 PART 3 STATEMENT OF MANAGEMENT'S RESPONSIBILITY 9 PART 4 INDEPENDENT AUDITORS' REPORT TO THE MANAGEMENT OF ENTRO ON THE FINANCIAL STATEMENTS 4.1 Independent auditors' opinion 10- 11 4.2 Statement of financial position 12 4.3 Statement of receipt and payments 13 4.4 Notes to the financial statements 14-21 ANNEXES 22-25 I I I I I I I 2 U I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) REPORTS AND FINANCIAL STATEMENTS I OFFICIALS AND PROFESSIONAL ADVISORS MANAGEMENT Fekahmed Negash Executive Director Teshome Atnafie Senior Regional Project Coordinator/Head Water Resources Development Unit El Sadig Abaker Goda Regional Finance and Administration Head I REGISTERED OFFICE Eastern Nile Technical Regional Office P.o. Box 27173 - 1000 Dessie road Addis Ababa AUDITORS HST, Chartered Certified Accountants, Mina Building, Wollo Sefer, P 0 Box 1608, Addis Ababa, Ethiopia BANKERS Commercial Bank of Ethiopia P 0 Box 255 Addis Ababa, Ethiopia LEGAL ADVISORS Dr Berhane Gebray and Associate, Corporate Lawyers and Consultants I I I I 3 I I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) NOTES TO THE FINANCIAL STATEMENTS I 1 ENTRO MANAGEMENT REPORT 1.1 Background The Eastern Nile Technical Regional Office (ENTRO) was established by Eastern Nile Council of Ministers (ENCOM) in 2002 for advancing the cooperative development of the water resources within the context of Eastern Nile Subsidiary Action Plan (ENSAP). The main tasks of ENTRO include: 1. Support for ENSAP Management; 2. Secretariat support to ENSAP and ENCOM; 3. Liaison with donors and partners; and 4. Management and coordination of Integrated Development of Eastern Nile (IDEN). I Eastern Nile Subsidiary Action Plan (ENSAP) is an investment program under the Basin Initiative. The Eastern Nile Council of Ministers (ENCOM) representing Egypt, Ethiopia, South Sudan and Sudan leads the program. ENSAP seeks, as objectives, to achieve joint action on the ground of poverty alleviation, economic growth and reversal of environmental degradation. The first ENSAP project is the Integrated Development of Eastern Nile (IDEN) project and initiates a regional, integrated, multipurpose program through a first set of investment, which confers tangible, win-win gains and demonstrates joint action between the Eastern Nile countries. Preparation of ENSAP investment project is funded through grants from the World Bank, African Development Bank, and the Government of Canada, France, Norway, the Netherlands and Japan. ENTRO has its own operational budget, financed by the member of Governments and through various aid programs. Brief descriptions of ENTRO's major on-going projects are as follows: 1 1.2 Project objectives 1.2.1 Nile Cooperation for Results Project (N-CORE) I The objective of the project is to facilitate cooperative water resource management and development in the Nile Basin. The project has their components. PART A: Advancing Nile Basin-wide Cooperation and Analysis which provides support to the NBI in W basin-wide core functions of facilitating cooperation and water resources management. This part is implemented by Nile-SEC. PART B: Promotion of Sustainable Development and Planning in the Nile Equatorial Lakes Region which provides support to NBI in its efforts to advance investment opportunities in the Nile Equatorial Lakes. NELSAP CU is responsible to accomplish this section. PART C: Enhancing Eastern Nile Planning and sustainable development: providing support to NBI in promoting cooperative activities, water resource management and sustainable development in the Eastern Nile. This part is executed by ENTRO. It includes the following activities. I I I 4 I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) NOTES TO THE FINANCIAL STATEMENTS (Continued) 1 ENTRO MANAGEMENT REPORT (Continued) 1 1.2.1 Nile Cooperation for Results Project (N-CORE) (Continued) a) Carrying out a program aimed at improving public domain access to the Eastern Nile knowledge base including: * developing analytical and forecasting tools for investment preparation and flood and drought management; * enhancing knowledge partnership with stakeholder networks; and 3 * promoting regional cooperation activities. b) Carrying out a program aimed at promoting sustainable development and growth in the Eastern Nile such as technical assistance to improve dam safety, assistance in the preparation of new watershed management projects, and the provision of training to the networks of environmental and social specialists. The programme is financed by the Nile Basin Trust Fund and the Cooperation in International Waters in Africa Trust Fund with budgets of USD 13.8 million and USD 14.5 million respectively. The grant from NBTF is closed in Dec 31, 2015. However, the grant from CIWA continues to November 2020. Initially, Part C of the project has a total grant amount of USD 1M for which project closing date is April 2017. Subsequently, the grant has amended to USD 1.25M without changing the closing date. However, the project is amended again by increasing the scope of the activities and the grant amount. An additional fund amount of USD 3.4M is added to the previous grant amount and the total grant amount increased to USD 4.65M. The grant closing date has also extended to November 30, 2020. Additional activities under this component will build on the momentum generated by ENTRO's successful flood forecasting, regional dam safety, and MSIOA process. The component will include support for ENTRO to (i) continue and expand issuance of seasonal and daily flood forecasts to governments, communities, NGOs, including potentially to South Sudan; (ii) build technical capacity in new national dam safety offices, including through strengthening the working partnership of a regional network of dam operators; (iii) provide increased real-time and technical data and analysis to countries; (iv) scale-up ENTRO's young professionals program and academic partnerships to continue building a new set of leaders in the Eastern Nile, among others; and (v) undertake an evaluation of the success of various pilot livelihood-based integrated watershed management interventions conducted by ENTRO, to inform riparian-led scale up of select best and most viable practices, as well as training of practitioners on lessons learned. 1.2.2 Baro-Akobo-Sobat Multipurpose Water Resources Development Study Project The project encompasses activities structured in to four output areas, namely: (1) Development of integrated water resources management and development plan for BAS sub-basin based on a comprehensive assessment of options through a Strategic Social and Environmental Assessment (SSEA) as well as through a technical, economic, financial and institutional assessment; ( 2) Identification of investment packages and feasibility study of selected priority investment projects with win -win benefits and that build trust and confidence among the EN countries; (3) Project identification of medium and long- term multi-purpose development projects (water supply and sanitation, hydropower, irrigation, navigation, flood control); and (4) Stakeholders consultation and engagement including engagement of potential financing agencies as well as the private sector in resource mobilization for implementation of short-term projects and for project preparation of medium and long-term projects. The total cost of the project is estimated at C 2,500,000 made up of manly of consultancy services for undertaking the study. The project will be implemented over a period of 36 months from grant effectiveness. The project will be financed by an Africa Water Facility (AWF) grant of Euro 2,000,000 and a NEPAD-IPPF grant of USD 667,000 (equivalent Euro 500,000). The project will be closed on Is August 2017. I 5 I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) NOTES TO THE FINANCIAL STATEMENTS (Continued) 1 ENTRO MANAGEMENT REPORT (Continued) 1.2.3 GIZ Support to NBI-ENTRO National training on Hydro-diplomacy / Negotiation technique The objective of the financing agreement is to facilitate a training program on hydro-diplomacy /negotiation to improve the national capacity of Eastern Nile countries technical and negotiating teams to undertake effective negotiation that confers win-win outcomes for all parties and thus make possible the building of lasting, institutionalized resource management regime in the Eastern Nile. It has a total grant agreement of USD 89,503 through August to December 2017. Strengthening hydro-diplomacy in the Eastern Nile cooperation process The objective of the financing agreement is to enable NBI/ENTRO to contribute to strengthening hydro-diplomacy in the Eastern Nile Basin. To enhance the capacity of key actors from the Nile riparian states to contribute to a cooperative solution of the Nile water conflict and effectively engage in the political process. It has a total grant agreement of Euro 184,502 (equivalent to USD 214,244) through January 2018 to June 2019. Integration of wetland water demand and e-flows requirements for the Sudd, Machar Marshes and Baro-Akobo-Sobat Wetlands into basin planning The objective of the financing agreement is to strengthen the technical and institutional capacities for sustainable management wetlands of transboundary relevance in the Nile Basin. It has a total grant agreement of Euro 304,426 (equivalent to USD 353,500) through January 2018 to March 2020. Support to implementation of the NBI EN Action Plan 2017-2022 The objective of the financing agreement is the implementation of the NBI EN Action Plan 2017- 2022 with a specific objective to enhance the capacity of the NBI to build consensus amongst riparian states on the sustainable and cooperative management and development of the basin's water resources. It has a total grant agreement of Euro 543,075 (equivalent to USD 631,703) through July 2017 to September 2021. 2 AUDIT OBJECTIVES, SCOPE, METHODOLOGY AND RESULTS 2.1 Audit objectives The objective of the audit is to express an opinion on the Eastern Nile Technical Regional Office financial statements for the period ended 30 June 2018. The audit includes but not limited to the following tasks: * Perform reviews of the accounting records and ascertain whether the laid down financial procedures are complied with; & Review evaluate and comment on the organization's compliance to the World Bank guidelines. * Review and evaluate the organization's accounting policies and administrative controls and report any significant weaknesses, together with recommendations for improvement and ensure that the respective accounts manual is updated in accordance with the respective guidelines; * Determine whether the management and financial systems, including internal controls, within the components are adequate for efficient and prudent management of funds; * Comment on the use of funds vis a vis approved budgets in relation to the agreement between the organization and donors; Assess the compliance with administrative/legal/fiscal issues regarding local employees contracted under the projects; * Recommend possible improvements and/or actions in any area on financial management and especially areas where weaknesses were noted; and a Follow up on the status of prior period audit recommenations. 2.2 Audit scope The audit scope required us to carry out sufficient audit steps and procedures to ensure that the audit objectives were met for the period ended 30 June 2018. Details of the steps and procedures are given below. I 6 I I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) NOTES TO THE FINANCIAL STATEMENTS (Continued) 2 AUDIT OBJECTIVES, SCOPE, METHODOLOGY AND RESULTS (Continued) 2.3 Audit Methodology We conducted the audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. Internal controls Evaluated significant internal controls to obtain a'sufficient understanding of the design of relevant controls, policies and procedures and whether they have been in operation during the period under review. Compliance with agreement terms and applicable laws and regulations Reviewed, assessed and reported on compliance with the terms and conditions of the agreement Representations by grantees Obtained specific written representations from management. Contractual obligations * Appraised relevant documents such as agreements between Nile Basin Trust Fund with Nile Basin Initiative as well as documents concerning rights and obligations with a view to providing a comprehensive appraisal of projects. * Verified compliance of projects expenditures with relevant terms of agreements as well as all the applicable rules. I Verified compliance of the recipient with the terms and conditions of the agreement with the donor. * Ensured timely submission of interim unaudited financial reports for the project as stipulated in the agreement. Receipts and disbursements Verified compliance with the disbursements and procurement procedures set up for ENTRO. Implementation " Examined whether the expenditures are classified in accordance with the budget or the project proposal where the latter forms part of the contract with the recipient. * Reviewed bank statements and accounts of the recipient and other relevant books of accounts and assessed whether they show a complete view of the income received and expenditure incurred in accordance with generally acepted principles. * Verified and confirmed that all commitments are genuine, with the relevant agreements disclosed within the financial records and are for the pursuance of agreed Project objectives. * Examined a representative sample of payments transactions of and within the Project induding accuracy and completeness of records. * Verified individual Project accounts and gave an opinion and/ or advice regarding the manner they are operated. Other income sources * Established whether other income generated by the Project, such as interest, in-kind/local contributions, exchange gains, etc.; have been used in furtherance of the Project objectives * Verified that contributions made towards project activities were made and used in accordance with relevant agreement. I I 7 I I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) NOTES TO THE FINANCIAL STATEMENTS (Continued) 2 AUDIT OBJECTIVES, SCOPE, METHODOLOGY AND RESULTS (Continued) 2.4 Results of the audit 2.4.1 Summary of results by audit objectives (i) Reach an opinion as to the validity of the financial statements. In our opinion, the financial statements give a true and fair view of the sources and uses of funds in accordance with the accounting policies set out on note 4.4 and in conformity with the grant agreement (ii) Report on the financial management and internal controls findings We reviewed the internal control structure and except for the matter referred in the management letter issued separately, we concluded that the system was adequate to meet the needs of the program. I I I I I I I I I U I I I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) 3 STATEMENTS OF MANAGEMENT'S RESPONSIBILITIES The management of Eastern Nile Technical Regional Office is responsible for preparing the financial statements for each financial year which gives a true and fair view of the Organization as at the end of the year and of the operating results for that year. The management of Eastern Nile Technical Regional Office is required to ensure the organization keeps proper accounting records which disclose with reasonable accuracy at any time the financial position of the organization. They are also responsible for safeguarding the assets of the organization. The management of Eastern Nile Technical Regional Office is responsible for the preparation of these financial statements that give a true and fair view in accordance with the financial reporting provisions of the World Bank, the accounting policies stated in section 4.4 of this report and for such internal controls as the management determine are necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. The management of Eastern Nile Technical Regional Office accepts responsibility for the financial statements which has been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity with the financial reporting provisions of the World Bank, the accounting policies stated in note 4.4 to the financial statements. The management of Eastern Nile Technical Regional Office is of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Organization and of the results of its activities. The management of Eastern Nile Technical Regional Office further accepts responsibility for the maintenance of accounting records which may be relied upon in the preparation of the financial statements, as well as adequate systems of internal financial control. The management also accepts responsibility for: i) designing, implementing and maintaining such internal control as they determine necessary to enable the presentation of financial statements that are free from material misstatement, whether due to fraud or error; ii) selecting suitable accounting policies and applying them consistently; and iii) making accounting estimates and judgements that are reasonable in the circumstances. The management certifies that, to the best of their knowledge, the information furnished to the auditors for the purpose of the audit was correct and is an accurate presentation of ENTRO's financial transactions. Nothing has come to the attention of ENTRO Management to indicate that the ENTRO will not remain a going concern for at least the next twelve months from the date of this statement. 3 Signed on behalf of the management by: Fekah d Negash El Sadig Abaker Goda Executive Director Regional Finance and Administration Head 26 December 2018 NAL I9 I I RO. Box 1608 Addis Ababa Ethiopia Chartered Certified Accountants and Authorized Auditors Tel: +251 115 527666/67 Fax: +251 115 528384 ftoshl4e fkilAftF9 ?& #£4? h4,("Fwww.hst-et-com I 4.1 INDEPENDENT AUDITORS' REPORT TO EASTERN NILE COUNCIL OF MINISTERS ON THE FINANCIAL STATEMENTS OF EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) 1. Opinion We have audited the accompanying financial statements of Eastern Nile Technical Regional Office (ENTRO), set out on pages 12 to 21 which comprise the statement of financial position as at 30 June 2018 and receipts and payments for the year then ended, and a summary of significant accounting policies and other explanatory notes. In our opinion, the accompanying financial statements give a true and fair view of the cash receipts and expenditure of the Organization and the funds at and for the year ended 30 June 2018 were utilized for the purpose defined in the funding agreement and in accordance with the accounting policies set out in note 4.4 to the statement and the financial reporting provisions of the donors. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). 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 ENTRO in accordance with International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA Code), together with other 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Report on other requirements In all materials respects, we confirm that: i. External funds have been used in accordance with the conditions of the relevant financing agreements, with due attention to economy and efficiency, and only for the purposes for which the financing was provided; ii. Goods and services financed have been procured in accordance with the relevant financing agreements and the financiers' procurement policies and procedures; iii. All necessary supporting documents, records, and accounts have been kept in respect of all Project ventures including expenditure reported using statements of expenditure (SOE) method of disbursement; iv. Designated Accounts have been maintained in accordance with the provisions of the relevant financing agreements and disbursement letter and funds disbursed out of the Accounts were used only for the purpose intended in the financing agreement; v. The financial statements have been prepared in accordance with the organization's accounting policies and relevant World Bank guidelines; vi. National laws and regulations have been complied with, and that the financial and accounting procedures approved for the project; and vii. There is verifiable ownership by ENTRO or beneficiaries in line with the financing agreement in respect of assets procured. Managements' Responsibility for the Financial Statements ENTRO's management is responsible for the preparation of financial statements that give a true and fair view in accordance with in accordance with the financial reporting provisions of the World bank, the accounting policies stated in section 4.4 of this report and for such internal controls as management determine are 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, the management is responsible for assessing the ENTRO'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 the management either intend to liquidate or to cease operations, or have no realistic alternative but to do so. 10 Partners: Tekeste Gebru; Solomon Gizaw; Getu Jemaneh; Yonas Harun; Solomon Melaku I I INDEPENDENT AUDITORS' REPORT TO EASTERN NILE COUNCIL OF MINISTERS ON THE FINANCIAL STATEMENTS OF EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) I (continued) Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, weather 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. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We 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 Organization's internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management. 0 Conclude on the appropriateness of the 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 ENTRO's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause ENTRO to cease to continue as a going concern * Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statement represents the underlying transactions and events in a manner that achieves fair presentation. We communicate with the management regarding, among other matters, the planned scope and timing of the audit nt audit findings, including any significant deficiencies in internal control that we identif I I Sol Pa rtr r Registe r 26 Dece HST General Partnership Chartered Certified Accountants and Authorized Auditors (Auditors' of Eastern Nile Technical Regional Office) Add is Ababa 1 11 I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) 4.2 STATEMENT OF FINANCIAL POSITION Note 2018 2017 Current Assets USD USD Cash and bank balances 4.7 1,556,215 898,091 Receivables 4.8 60,737 2,342,118 Total Assets 1,616,952 3,240,209 I Current Liabilities Payables 4.9 57,286 803,207 Fund balance Accumulated fund balance 4.3 1,559,666 2,437,002 Total Funds and Liabilities 1,616,952 3,240,209 I These financial statements on pages 12 to 21 were approved by ENTRO management on 26 I December 2018 and signed on its behalf by: Fekahmed Negash El Sadig Abaker Goda Executive Director Regional Finance and Administration Head LEll TECIHV c, %NAL OFF/C EgyptSun I NT, I I W I 12 I I, N EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) 4.3 STATEMENT OF RECEIPTS AND PAYMENTS SNote 2018 2017 INCOME USD USD Member countries contributions 333,333 864,000 Other donors' contribution 1,740,637 2,161,148 Other income 3,893 74,794 Total income 2,077,863 3,099,942 PAYMENTS Personnel costs 271,271 237,953 Supplies and services 73,034 68,180 Service costs and charges 1,210,881 2,047,187 Conference and training 251,676 220,946 Field travel expenses 2,521 Capital expenditure 2,226 68,069 Total payments 5 1,809,088 2,644,855 1 Excess income (expenditure) 268,775 455,087 Fund balance as at 1 July 1,290,891 1,981,915 Prior year adjustment 4.5.1 - (1,146,111) U+5 666 1,290,891 I I 13 I W I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) NOTES TO THE FINANCIAL STATEMENTS (Continued) 4.4 SIGNIFICANT ACCOUNTING POLICIES I 4.4.1 Basis of preparation The financial statements have been prepared on a modified cash basis i.e. Cash receipts and disbursements modified to accrue for outstanding payables and receivables. 4.4.2 Budget The budget is developed on the same accounting basis (modified cash basis), same classification basis, and for the same period as for the financial statements. The budget was approved as required by the standard conditions of the grant and work-plan as approved by the governance. 4.4.3 Income Income represents amounts received in US dollar from member country contributions and other donor contributions during the year. Income is recognised when the funds are received into the bank. The balance of funds for the period represents amounts not utilised as at the close of the period. 4.4.4 Expenditure Expenditure represents amounts disbursed and costs incurred denominated in US dollar. They also include losses arising on fluctuation of the US dollar against the Ethiopian Birr. 4.4.5 Fixed Assets Fixed assets are expensed on purchase in the period of acquisition. ENTRO maintains separately an asset register that track all the organizations fixed assets. 4.4.6 Imprest Funds transferred to components are accounted for as imprest and expensed when the financial statements and retirements have been submitted and accepted by ENTRO. 4.4.7 Taxation Income received by ENTRO is not subject to tax since it is exempted from any form of tax as it is donor funds. 4.4.8 Foreign currency transactions Functional currency translation Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are presented in United States Dollars ("USD") which is the Organization's functional currency. I 14 I I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) NOTES TO THE FINANCIAL STATEMENTS (Continued) 4.4.8 Foreign currency transactions (Continued) Transactions and balances Cash receipts arid payments arising from transactions in a foreign currency are recorded in the financial statements using the actual rate of exchange. Foreign currency transactions are translated into the functional currency of the Organization 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 foreign currencies are recognized in statements I of receipts and payments. 4.4.9 Fund balances brought forward These relate to unused funds that were carried forward from prior period. The amounts agree to the audited financial report of 30 June 2017. 4.5 GRANT The income received during the period was as follows: 2018 2017 Date Note Record Confirmed Record Confirmed USD USD USD USD Local - - - - Foreign Member countries contributions 4.5.1 333,333 333,333 864,000 864,000 Other donors' contribution 4.5.2 1,740,637 1,740,637 2,161,148 2,161,148 2,073,970 2,073,970 3,025,148 3,025,148 4.5.1 Member countries contributions Based on NBI harmonized manual, Income from member countries are recognised as income in the book of ENTRO when received into ENTRO's bank accounts. However, until 30th June 2017, country contribution USD 1,146,111 has been recorded as receivables from member countries accrual basis for the year from 2010 to 30 June 2017. Consequently, adjustment totalling USD 1,146,111 has been made during the year as prior year adjustments to reverse contribution due from member countries against fund balance. 4.5.2 Other donors' contribution Following Baro-Akobo-Sobat project closure, unused fund balance of USD 75,613 from AfDB was reimbursed. Furthermore, under the financing agreement from GIZ to facilitate national training on hydro-diplomacy/negotiation technique for Eastern Nile Technical Teams, unused fund balance of USD 22,220 was reimbursed to GIZ. 4.6 NON-CURRENT ASSETS Purchase of fixed assets is expensed on acquisition. ENTRO maintains an asset register that tracks all project fixed assets, and the existence and benefic>., been verified by the 1organization. UU art..15 U I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) NOTES TO THE FINANCIAL STATEMENTS (Continued) 4.7 CASH AND BANK The cash and bank balances as at 30 June: 2018 2017 USD USD Cash on hand 471 917 Cash at Bank 1,555,744 897,174 1,556,215 898,091 4.8 RECEIVABLES Receivable include the followings: 2018 2017 USD USD Sundry debtors 8,050 2,304,751 VAT receivable 27,068 15,356 Staff advances 25,619 22,011 60,737 213421118 4.9 PAYABLES 2018 2017 3 USD USD Payables amounts include the following: Accounts payable 3,816 3,282 Accruals Accruals36,843 3,000 Sundry payables 16,627 796,925 I 571286 80207 3 4.10 CURRENCY The financial statements are presented in US dollars (USD). 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The income and expenditure are converte oth olicy of ENTRO. Thus Euro budget is converted to USD initially at the rate prevailing on the date of a 19 I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) NOTES TO THE FINANCIAL STATEMENTS Note 8 Statement of Receipts and Expenditure - GIZ Support to ENTRO Total Approved Actual Project Budget Actual Year Ended (For Life of Previous June 30, Cumulative Budget Line Description Project) Years 2018 To Date USD USD Income Fund Received 1,424,951 - 414,212 414,212 Total Income Expenditure Support to Hydro-diplomacy in Nile Basin (Agreement No. 83263718 & 83273048) 89,503 - 61,233 61,233 National traininq on neqotiation techniques - Ethiopia 29,000 - 19,827 19,827 National training on negotiation techniques - South Sudan 30,503 24,753 24,753 National traininq on neqotiation techniques - Sudan 30,000 - 16,654 16,654 NBI-ENTRO workplanl (Agreement No. FA-2017-83257593) 56,000 - - Dam Cascade Manaqement Study Phase I 56,000 - - - I NBI-ENTRO workplan2 (Agreement No. FA-2017-83257602) 80,000 - 21,310 21,310 Dam Cascade Manaqement Study Consultation 56,000 - 21,310 21,310 Junior Media Expert 24,000 - - - NBI-ENTRO AA Hydro-diplomacy (Agreement No. 81220020) 214,244 - - - Traininq courses and study tours for neqotiators 178,075 - - - Media Workshops 34,048 - - - Bank charqe 2,122 - - - NBI-ENTRO Wet land (Agreement No. 81220168) 353,500 - - - Wetland manaqement plans 350,000 - - - Bank charge 3,500 - - NBI-ENTRO / Implementation of EN Action Plan 2017-2022 (Aqreement No. 81229622) 631,703 - 10,821 10,821 Dam Cascade 505,949 - 10,700 10,700 Hydroloqical Monitorinq 19,274 - - - Media and Communication 9,637 - - - Orqanizational and Capacity Development 3,855 - - - Project Staff 86,734 - - - Bank charqe 6,254 - 121 121 Total Expenditure 1,424,951 - 93,365 93,365 Surplus/Deficit - 320,847 320,847 Fund Balance Beginning - - Gain/Loss on Exchange Revaluation -(4,719) (4,719) Fund Balance Ending - 316,128 316,128 Represented By: Current Assets Cash and bank balance 316,129 Debtors and prepayments3112 316,129 Less: Current Liability Accounts payable Net Current Assets 316,129 Note: Some of the grant agreements are in EURO. Their income and expenditure are converted to USD as per the policy of ENTRO. 20 W EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) NOTES TO THE FINANCIAL STATEMENTS Note 9 Statement of Receipts and Expenditure - Country Contribution Actual Year Ended June 30, Cumulative To Budget Line Description 2018 Date USD USD Income Member Countries Contribution-Ethiopia 333,333 333,333 Member Countries Contribution-South Sudan - - Member Countries Contribution-Sudan - - Other Income 1 1 Total Income 333,335 333,335 Expenditures Personal Costs 174,940 174,940 Supplies and Services 3,974 3,974 Service Costs and Charges 430,819 430,819 Conference and Training 54,143 54,143 Field Travel Expense Capital Expenditure 560 560 Total Expenditure 664,436 664,436 Surplus/Deficit (331,101) (331,101) Fund Balance Beginning 573,673 573,673 Fund Balance Ending 242,572 242,572 Represented By: Current Assets Cash and bank balances 229,867 Debtors and prepayments 37,120 266,987 Less: Current Liability Accounts payable 24,415 Net Current Assets 572 I I I I UU I g . 21 U I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) STATEMENT OF DISBURSMENT ANNEX -1 A. CIWA-NCORE Consultancy Service, Goods and Workshop and Training, Operating Costs USD IFR No. Quarter Ended Q1 September 30, 2017 109,194 Q2 December 31, 2017 135,785 Q3 March 31, 2018 140,307 Q4 June 30, 2018 173,551 I I I I I I I 22 W EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) EXPENIDITURE FOR WORLD BANK PROJECTS-BY COST CATEGORY ANNEX -2 I A. CIWA-NCORE Actual for the y/e June 30, Cumulative To Cost Category Grant Amount 2018 Date USD USD USD Goods, Workshops and training, Consultancy service, Operating Cost 4,650,000 558,837 1,580,860 I I I I I I I I I I I I 23 I EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) DESIGNATED ACCOUNT RECONCILIATION STATEMENT ANNEX-3 Currency: USD CIWA-NCORE designated account reconciliation statement Account number: 1000106187073 Depository bank: Commercial Bank of Ethiopia, IBD P O Box 255 Addis Ababa, Ethiopia Grant agreement: TF 013767 Currency : United States Dollars (US$) 2018 2017 I Opening cash balance 246,022 81,197 Add: Advance to and documentation of DA 1,078,886 757,385 Direct payment - - Funds available during year 1,324,908 838,582 Less: Increase/Decrease in cash transferred to ETB account 31,648 39,693 Costs paid from USD DA 311,487 489,900 Increase/Decrease in Direct payments - - Increase/Decrease in receivables from other projects - (1,566) Increase/Decrease in advances payables to other projects 224,215 64,534 Total payments during year 567,349 592,560 Closing cash balance at 30 June 757,559 246,022 Closing bank balance 758,250 247,851 Unpresented cheques at 30 June (691) (1,828) Uncredited cheques at 30 June - - Closing cash balance at 30 June 757,559 246,022 I W n I I 1 24 EASTERN NILE TECHNICAL REGIONAL OFFICE (ENTRO) BUDGET UTILIZATION REPORT AS AT 30 JUNE 2018 ~ANNEX-4 Currency: USD BUDGET BUDGET ORIGINAL REVISED UTILIZATION VARIANCE I CIWA - Nile Cooperation for Results Project 1,722,872 697,407 558,837 138,570 EU 100,000 100,000 - 100,000 GIZ 424,346 424,346 98,083 326,263 BAS MPWRDP 444,657 487,689 487,689 - Riparian Countries Contribution 727,287 727,287 664,436 62,851 Reserve Fund - - 44 (44) 3,419,162 2,436,729 1,809,088 627,641 I I I I I I I I I I * 24