REPORT ON THE FINANCIAL STATEMENTS OF THE DISASTER VULNERABILITY REDUCTION PROJECT - SAINT LUCIA PROJECT FINANCED BY: SCF-PPCR GRANT NO. TF017143 SCF-PPCR LOAN NO. TF01 7101 IDA CREDIT NO. 5493-LC MANAGED BY: THE PROJECT CO-ORDINATION UNIT OF THE MINISTRY OF FINANCE, ECONOMIC GROWTH, JOB CREATION, EXTERNAL AFFAIRS AND PUBLIC SERVICE FOR THE TWELVE-MONTH PERIOD APRIL 1, 2016 TO MARCH 31, 2017 December 2017 AUDIT OF THE RESOURCES MANAGED DURING THE PERIOD APRIL 1 2016 TO MARCH 31, 2017 BY THE PROJECT CO-ORDINATION UNIT (PCU) OF THE MINISTRY OF FINANCE, ECONOMIC GROWTH, JOB CREATION, EXTERNAL AFFAIRS AND PUBLIC SERVICE UNDER THE DISASTER VULNERABILITY REDUCTION PROJECT - IDA CREDIT NO. 5493- LC, SCF-PPCR- GRANT NO. TF017143 AND SCF-PPCR LOAN NO. TF017101 Table of Contents PAGE TRANSMITTAL LETTER i SUMMARY Background 1 Scope and Objective of the Audit 3 PROJECT FINANCIAL STATEMENTS Independent Auditor's Report 5 Sources and Uses of Funds 7-8 Statement of Cumulative investment 9-11 Statement of Cash Balances 12 Notes to Financial Statements 13 INTERNAL CONTROL STRUCTURE Independent Auditor's Report 22 SPECIAL ACCOUNTS STATEMENT Independent Auditor's Report 24 Designated Account Reconciliation 25 COMPLIANCE Independent Auditors Report 26 GOVERNMENT OF SAINTLUCIA Office of the Director of Audit Conway Business Centre, Level 3, Jn. Baptiste Street Castries, Saint Lucia W.I. Tel: 758-468-1508;1510;1501 Fax: 758-468-1534 E-mail: audit@gosl.gov.Ic Ref. No. GF4418-228 December 20, 2017 The Permanent Secretary Department of Economic Development, Transport and Civil Aviation Finance Administrative Centre Pointe Seraphine Castries St. Lucia Dear Sir, Enclosed, please find four (4) copies of the Audit Report on the Financial Statements of the Disaster Vulnerability Reduction Project (DVRP) for the period April 01, 2016 to March 31, 2017. The Project is financed by the IDA CREDIT NO. 5493-LC, SCF-PPCR GRANT NO. TF017143 and SCF-PPCR LOAN NO. TF017101. Yours faithfully Yvonne James DEPUTY DIRECTOR OF AUDIT PROJECT BACKGROUND The Government of Saint Lucia (GOSL) signed three financing agreements on July 16, 2014 with the World Bank for the Disaster Vulnerability Reduction Project, totally USD $68,000,000.00. The Project aims to support the country's ongoing efforts to move forward towards a more climate resilient future. In the last two (2) decades, disasters have had devastating social and economic impacts, which are driving the Government's interest to build resilience to climate- related risks. As global climate change continues to increase the frequency and intensity of climate-related events, many of Saint Lucians' most vulnerable - particularly the rural poor and agriculturalists - are expected to be impacted disproportionately. Tropical Storm Debbie in 1994 and the Tropical Wave in 1996, for example, resulted in cumulative damages of US$93.1 million to property and infrastructure across the island. Hurricane Tomas in 2010 affected major sectors of the economy and diminished growth, with the total impact estimated at US$336 million or roughly 34 percent of Saint Lucia's GDP. Most recently, the passage of a low-level trough in December 2013 resulted in combined damage and losses of US$99.8 million, equivalent to 8.3 percent of the island's GDP. In addition to devastating large-scale disasters, small-scale flooding is endemic in low-lying areas and coastal villages already suffering from socio-economic vulnerabilities. Financing is made through three separate financing instruments as indicated below: Strategic Climate Fund: Grant - (SCF Grant# TF017143) - US$12,000,000 Loan - (SCF Loan # TF017101) - US$15,000,000 International Development Fund: IDA Credit (IDA Credit #5493-SLU) - US$41,000,000 PROJECT OBJECTIVES Generally, the proposed project would benefit the country's 174,000 inhabitants by reducing Saint Lucia's vulnerability to natural hazards and the adverse impacts of climate change. The Project is comprised of the following components: Component 1 - Risk Reduction and Adaptation Measures (US49 Million). This component would support structural and non-structural flood and landslide risk reduction interventions and climate adaptation measures to improve Saint Lucia's resilience against current and future climatic shocks. Additionally, the component would finance the reconstruction of critical infrastructure damaged during the December 2013 flooding, using the "build back better" approach. Activities would also address other potential risks (e.g. seismic) and would ensure that financed works are generally disaster resilient. 1 Sub-projects may include the following: (1) reinforcement of flood control infrastructure; (ii) climate resilient rehabilitation of road sections, including drainage improvements, slope stabilization works and retrofit of select bridges; (iii) retrofits and climate resilient rehabilitation of priority emergency shelters; (iv) climate- resilient rehabilitation of water supply infrastructure (v) retrofit and rehabilitation of existing schools and health centres; and (vi) preliminary assessments and technical studies requires to implement such works. Component 2 - Technical Assistance for Improved Assessment and Application of Disaster and Climate Risk Information in Decision-Making (US$10 million). This component would support capacity building for open systems and platforms to create, share, analyse and use disaster risk and climate change data and information for improved decision-making, and engineering design for risk reduction and climate change adaptation. Specifically, the component would finance, inter alia: (i) the creation of a high resolution digital topographic and bathymetric model for Saint Lucia; (ii) sea level rise modelling and coastal flood and erosion risk mapping; (iii) design and deployment of meteorological, hydrological, and sea level rise monitoring networks to provide high resolution hydrologic data; (vi) deployment of an environmental health surveillance system; and (v) technical assistance and regional capacity building and training workshops to promote safe and uniform building standards and harmonize geospatial data standards across the Eastern Caribbean. Component 3 - Climate Adaptation Financing Facility (CAFF) (US$5.0 million). This component is designed to establish a pilot financing mechanism meant to promote increased climate resilience under a climate adaptation financing facility (Climate Adaptation Financing Facility or CAFF), including the provision of retail loans (Sub-loans) to eligible households and private firms or business, to finance climate adaptation investments to build resilience of assets and livelihoods, intended to reduce risks associated with catastrophic hydro meteorological shocks. Component 4 - Contingent Emergency Response (US$1.0 million). This provisional component would support carrying out of emergency recovery and reconstruction subprojects under an agreed action plan of activities, which is designed as a mechanism to implement the Recipient's response to an Emergency. The component would allow rapid re- categorization and reallocation of project financing from other projects to partially cover emergency response and recovery costs associated with a natural catastrophe. The component will only be triggered in the event of a natural disaster, either national or localized in scope. The triggering of the component is contingent upon (i) either a Declaration of a Natural Disaster or activation of the National Emergency Management Plan in accordance with the laws of Saint Lucia, particularly the Disaster management Act (2006) or the Emergency Powers Disaster Act (CAP 14.07); and (ii) a formal request to the Bank to activate the component in accordance with the component specific Operations Manual. This component could also be used to channel additional disaster response funds, should they become available. 2 Component 5 - Project Management and Implementation Support (US$3.0 million). Activities under this component would support strengthening the institutional capacity for Project management and implementation, including: a) staffing the National Development Unit (NDU) and Project Coordination Unit (PCU); (b) building the technical capacity of said NDU, PCU and the Sustainable Development and Environment Department (SDED) within the Ministry of the Public Service, Sustainable Development, Energy, Science and Technology; (c) training of NDU, PCU and SDED staff, and strengthening the respective capacity for management, supervision, monitoring and evaluation of specific Project activities; and (d) carrying out technical and Project audits, all through the provision of technical advisory services, training, operating costs and acquisition of goods. Incremental operating costs incurred by implementing agencies would also be covered as well as those required for outside consultancies to prepare and supervise specific activities. AUDIT OBJECTIVES The purpose of the audit was to express a professional opinion on the financial position of the project at the end of the period audited and to report on the adequacy of the internal controls. With this in mind, the specific objectives of the audit were to: - Issue an opinion as to whether the Project financial statements present fairly, in all material respects, the financial position of the project, the funds received and the disbursements made during the period audited, as well as the cumulative investments at the end of the period, in accordance with national accounting standards and the requirements of the respective agreements with the Bank and other co-financing organizations. - Evaluate the adequacy of the management control framework of the Project Coordination Unit (PCU) as well as the degree to which the Department complies with the applicable accounting regulations, policies and standards. AUDIT CRITERIA The audit will be conducted according to policies, standards, procedures and agreements contained in the following: - Project Appraisal Document (PAD) - Financial Management Systems Manual - Credit Agreement NO. 5493-LC - SCF-PPCR GRANT NO. TF017143 - SCF-PPCR LOAN NO. TF017101 - The Loan Administrations Change Initiative (LACI) - Guidelines Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers - January 2011 - Procurement under IBRD Loans and IDA credits - revised October 2006 - Estimates of the Government of St. Lucia 2016/2017 and Supplementary Provisions - Financial Accounting Reporting and Auditing Handbook - Revised Laws of Saint Lucia, Chapter 15.01, Finance (Administration) Act - Revised Laws of Saint Lucia, Chapter 15.01, Financial Regulations 3 - Revised Laws of Saint Lucia, Chapter 15.01, Procurement and Stores Regulations - Finance, Treasury and Public Service Circulars - Related Audit Programs 4 GOVERNMENT OF SAINT LUCIA Office of the Director of Audit Conway Business Centre, Level 3, Jn. Baptiste Street Castries, Saint Lucia W.L Tel: 758-468-1508;1510;1501 Fax: 758-468-1534 E-mail: (udit@Jgosl.gov.lc Ref. No. GF4418-228 INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS To: Permanent Secretary, Department of Economic Development, Transport and Civil Aviation Independent Auditor's Report on the Financial Statements We have audited the accompanying Statement of Sources and Uses of Funds and a summary of significant accounting policies and other explanatory notes for the Disaster Vulnerability Reduction Project (DVRP) executed by the Ministry of Economic Affairs, Planning, Investment and National Development, financed by the International Development Association (IDA) Project Preparation SCF-PPCR-Loan No. TF017101, SCF-PPCR-Grant No.TF017143 and Credit No. 5493 for the year ended March 31, 2017. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these Financial Statements in accordance with the Special Purpose Framework accordance with the agreed upon terms with the World Bank, Guidelines and the accounting policies of the Government of Saint Lucia. This responsibility includes: 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; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor's Responsibility Our responsibility is to express an opinion on these Financial Statements based on our audit. Our audit was guided by the International Standards of Supreme Audit Institutions (ISSAI) issued by the International Organization of Supreme Audit Institutions (INTOSAI) and the World Bank's requirements, specifically the Bank's Guidelines Annual Financial Reporting and Auditing for World Bank-Financed Activities. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements. "Towards Greater Accountability" 5 The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Financial Statements whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the Financial Statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by program management, as well as evaluating the overall presentation of the Financial Statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. As described in Note 2, the Statement of Sources and Uses of Funds was prepared using the modified cash basis of accounting which is another comprehensive basis of accounting other than generally accepted accounting principles. Opinion In our opinion, the Financial Statements presents fairly, in all material respects, the financial position of the project, the funds received and the disbursements made as well as the cumulative investments for the financial period ended March 31, 2017 in accordance with the basis of accounting described in Note 2, the terms of the IDA CREDIT NO. 5493-LC, SCF- PPCR GRANT NO. TF017143 and SCF-PPCR LOAN NO. TF017101, and additional requirements of the accounting policies of the Government of Saint Lucia. All expenditures reported were eligible for financing and funds were used only for the project purposes. We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of the audit. In our opinion, the financial statements are in agreement with the information provided. Emphasis of Matter Basis of Accounting and Restriction on Distribution and Use Without modifying our opinion, we draw attention to Note 2 to the financial statements, which describes the basis of accounting. The financial statements are prepared under the Special Purpose Framework to comply with the financial reporting provisions of the World Bank. As a result, the financial statements may not be suitable for another purpose. Our report is intended for the World Bank and Government of Saint Lucia and should not be distributed to or used by parties other than the World Bank and Government of Saint Lucia. Yvonne James DEPUTY DIRECTOR OF AUDIT Castries, Saint Lucia October 13, 2017 6 Government of Saint Lucia Disaster Vulnerabiltiy Reduction Project Statement of Sources and Uses of Funds IDA Credit 54930, SCF Grant 17143 and SCF Loan 17101 For the Financial Year April 1, 2016 to March 31, 2017 Figures in United Sates Dollars (USS) Current Year April 1. 2016 to March 31, 2017 Cumnouloati Actual to date Cumulative1Cumulativ Prior Year _ TF 17143 (Grant ' TF 17101 *IDA 54930 *TF 17143 [ TF 17101 IDA 54930 'TF 17143 1 TF 17101 (Loan Total Other Receipts *IDA 54930 60%) 18%) (Loan 22%) Total Other Receipts PPA Q8570 (60%) (Grant 18%) (Loan 22%) Total Other Receipts PPA Q8570 (60%) (Grant 18%) 22%) Cash Receipts _ - _ I _ World Bank Financing 6,231.926.47 - 3,191,499.97 1,059,548.18 1.980,878.32 11.342,675.44 - 256,485.67 6,602,248.94 1.859.54.18 2.80.878.32 5.367,234.64 - 256,485.67 3.410.748.97 800,000.00 900.000 00 Desiaated Accosnt s 6.231.926 47 3.191.499.97 1.059.548.18 1,980,878.32 10,806,872.20 6.066.445.70 1859548.18 2.880.878.32 4.574,945.73 2,874,945.73 00000 00 900.00000 Direct Payment 535.803.24 535.803.24 - - 535,80324 535,803.24 PiA0570 ym 256.485.67 256.48567 256,485.67 Other Receipt, 20,068.49 20,068.49 - - - 27,880.78 27.807.78. - - 7.81229 7,812.29 - - GOSL- 1004 5 19,555.09 19,555.09 19,555.09 19.555.09 Intrest Erned 67.00 6700G 2,896.35 2,896.35 -- 2.829 35 2.829.35 Sale of Tender document Revenue 5 446.40 446.40 5,429.34 5,429.34 498294 4,982.94 TotalReceipts 6,251,994.96 20,068.49 3,191.499.97 61,059,54.18 1,980.78.32 11.370,556.22 27880.78 256,45.67T 6,602,248.94 1,859.548.18 2,000,070.3? 5.375.046.93 7,812.29 256,485.67 3,410.748.97 00,000.00 900,000.00 I _ _ _ _ _ __ ____ 1 _ _ 1 TF_ 170 H-minF_ _ 1 TF 17143 (Grant * TF 17101 . IDA 54930 T TF17143 0TF 17101 IDA 54930 * TF 17143 0 TF 17101 (Lon tess: Expenditures by Component and Category Total Exp. GOSL 1004 0 IDA 54930 (60%) 18%) (Loan 22%) Total Exp. GOSL 1004 (60%) (Grant 18%) (Loan 22%) Total Exp. GOSL 1004 (6%) (Grant 18%) 22%) Component 1: Risk Reduction and Adaptation Measures . 3,679.928.52 19,555.09 2,196,224.06 58, 867.22 805.282.15 5,727.74.51 1955.09 8,51354 3,419.883.55 1.025.96.03 1 1,253,957-30 2.047.945.99 - 8,513.54 1,223,659.47 367,097.84 448675.14 Rehabilitation of Marchand River Bank Protection 306.976.97 184,186,18 55,255 85 67,534.93 307,884.64 14.730078 55.419.24 67,734.62 907.67 544.60 163.38 199.69 Flood Mitigation and Drainage Study at Hewnorra T282.35 169.41 50 82 62.12 282 35 169.41 50.82 62.12 International Airport and George F. L.Charles Airport iL ___7__70.996.8 _4_2_0__2,9_8 Road ood Bridge Rehabilitation through Slope Stabili7,aimn andIF_________ roadn Ir eSroveme tas 1.742.177.77 1.045.306.66 313.592 00 383,279 11 2.527.172.56 1,516.303 56 454.891 041 96 784.994 79 470,996 8 141.299.06 172,698.85 Retroftting of Selected Priority Emergency Shelters2279.11 167.47 50.24 61.40 43,908.70 26.345 23 7.90356 9659.92 43.629.60 26,177.76 7,853.33 9,598.51 Rehab1,.il ,Rtato ,r erFirtiog ofWater S.pp1ySystem: NonTIFFFF1111 Revnle Water Meters 200.53 120.32 36.10 44.12 154.562.92 8,513.54 87,629.63 26.288.89 32,13086 155,046.86 8513.54 87.919.99 26,375.99 32,237.33 Reconstruction or Rehabilitation of Schools and Health Centres 1.537.163.56 19,555.09 910,565.08 273,169.52 333.873 86 2.560,500 28 19,555.09 -T I1.524,567,11 457.370.13 559,007.95 1.023,336.72 614,002.03 184,200.61 225.134.08 National Plans, Polices, Strategies an Technical Assistance to 9313059 55,878 36 16,763 1 20.48873 133,563.07 80,13784 24,041.36 29,337 397480 4 7 14 8.744.5 Component 2- Technical Assistance for Improved Assessmeent and Application of Disaiserand Climate Risk 6b Informtion Maiong 53,803.95 1 32,282.37 9,684.71 11,836.87 272,261.95 - 78,107.14 116,492.89 34,947.87 42,714.06 218,458.00 - 78,107.14 84,210.52 25,263.15 30,877.20 Collection of high resolution LIDAR data and creation of High F 9 [ 3 7 1 T T esoion Ditgital Topographic and Bathymetric model for 1 96,25 28 88 35,29 1642 92888 35.29 62.077.99 Sea level Rise Modelling and Coastal Flood and erosion risk 46,34990 2709.94 1 8.34 1969 aPpmgr- Capacity Building for Meteorological Services, including Design and deployment of Meteorological. Hydrological, and 5 .0657 49 53. 10. _8.451.25 sea level rise 53,365.64 I32,019.39 9,605.02 1704 3,069.33 I ________I 50,321.60 15,09648__ (.451.25 _____ _____ Development of an Envommental Health Surveillance system 7 Government of Saint Lucia Disaster Vulncrabiltiy Reduction Project Statement of Sources and Uses of Funds IDA Credit 54930, SCF Grant 17143 and SCF Loan 17101 For the Financial Year April 1, 2016 to March 31, 2017 Figures in Unsited States Dollars (USS)__ _ _ _ _ _ __ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ sNotes i year April 1, 2016- March 3 217 Y F pi 1t 2016 to Mrh120 Cummnulativie Actuna to date Cm ....ulaivl Cumulative Prior Year TTF 17143 (Grant * TF 17101 *IDA 54930 *TF 17143 -TF 17101 IDA 54930 TF 17143 'TF 17101 (Loan Toti Oiher Receipts *IDA 54930(60%) 18%) (Loan 22%) Total Other Receipts PPA Q8570 (60%) (Grant 18%) (Loan 22%) Totl Other Receipts PPA Q0570 (60%) (Grant 18%) 22%) Evaluation of Health of Coral Reef Systems and Rapid 8.59845 10,50922 31,922.97 7,023f5 Monitoing methods for water quality and coral reef 47.769.19 - 6 Enhancing the Capacity of the Fire Department and Nemo including review of opeeations and allied services - - - - - Strengthening of the Country's GIS analysis Capacity to maintain risk and spatial data managemont system,tough_ technical assistance, training and Procurement ofequipment 277.88 166.73 50.02 61 13 140.463.01 78.107.14 37.413.52 11.224.06 13.718 29 78107.14 78,107.14 Cotponent 3 - Climate Adaptation Financing Facility 1.056.48 - 461.41 138.42 456.66 1,056.48 - 461.41 138.42 456.66 - - Adaptation Loan Facility Technical Assistance 1,056.48 461.41 138 42 456.66 1,056.43 461.41 138.42 456.66 Component4 - Contingent Emergency Response - - - Soppoet 613,692.12 - 368,210.72 110,464.00 135,017.40 1.8974656.71 169.864.99 1,036.655.54 311,010.48 380,125.70 1,283.964.62 - 169,864.99 66,444.82 200,546.49 245_108.32 to 132,399.64 39,719.89 48,546.53 120,494.09 72,296.46 21,688.94 26,508.70 Suporn to MIPST 100,171 96 60. 103. 18 18.030,95 22,037,83 220,666.06- -- Support to MOF/PCU 412.174.00 247.299 86 74,190.73 90,683.41 1.275.985.62 58.439.87 730,507.98 219,166.20 267,871.57 062.956.03 _58439.87 482,694.77 144.821.46 176.999 3 Support to MOPD - . - I 2 - I . - I99 Support to Accountant General 15,559.94 9.335 96 2,80079 3,423 19 54,277.99 7.034.571 28.346.051 8,503 81 10,393.55 39.573.64 7,034.57 19.523 44 5,857.03 7.158.60 Support to MOSDEST 85,786.21 51,47172 1544153 18,872.97 346,727.061 104.390.55 145.401.86 43,62059f 53,314.05 260,940.86 104,390.55 93,930.16 28,179.06 34.441.09 Sale ofTender documnents , 1 - 1 I 1 TotalEapenditures 4,348,481.07 19,555.09 2.597,178S5 779,15435 952,59308 7.898.849.66 19,555.09 256.485.67 4,573.493.37 1,372,66180 1,677,253.72 3,550.368.61 - 256,485.67 1,976,314.81 592,907.48 724,660.65 Adeantce1to11,eSLDB1,,1di,r CAFF eAcot Oe93074 ______ _________1________ 7,674 7.6,4 ________ _____ I .1,dAcco__ ...1 4 973,067.4M 973,067.48__ 973.067.4________18______ F_______ Net Recert/aruncr,to 930,446.31 513.40 594,321.42 280,393.83 | 2.499,636908| ,35.9 (0.00) 2.028,755.57 487,486.38 230,567.12 1,824,678.32 7,812.29 (0.00) 1,434,434.16 207.092,52 175,339.35 I certify that the ahove infornmation are correct as per the record of the books of accounts of thte project and to the best of my knowsledge Signature of the Finance Manager . . Signature of the Project Coordinator ............. . .. ..-.** ..-- 8 Government of Saint Lucia Disaster vulnerabilitY Reduction Project Statement of Cumulative Investment SCFeLoan Tith16 to iMarch121 in united States Dollars For the Financial Yearnce,ro eaCm t Current Year Cumulative current Year Cumulative value oflInvoices Disbursement category Vau fIvies financed by SCF Cumulative value of Invoices financed by TF17101 Valu of1 duinvoicpril 1, 2016 to financed by TF17101 Category Description March 31, 2017 Category Number 724,660.65 1,676,966.25 Gods ors,nn_onIsulting services' 952,305.60 Gos,lwors, non-lcosT raining and operating consutns serices, of the Project - (IDA- 1)costs for part A, BaonU and SCF Loan- 22%) 60,SCF Grant-18 287.48 uligservices and 287.48 Work, goods, non conforultimaeAdpato consultants' servie Par Clofathe Adprtojet(Dn 2) Subprojects und,100%rSCF Gfhrat t(0%) 0%, SCF Loan -10OSCGrn-0% Goods, work, non- consulmersec operating consult-ants' services aecovery and 1724,660.65 3) Costs uo me lb0proj)ects under Part D Of95,3.81672.2 Total th etof my knowvledge Noe111Wt l inflowsan outflos thea exhaea oRaa osassme to be s.6882th record of the books of accounts of the project and to tebs Signature of the Finance Manager :...*****...* .... Signature of the Project Coordinator :....***. * 9 Government of Saint Lucia Disaster Vulnerability Reduction Project Statement of Cumulative Investment SCF Grant TF 17143 For the Financial Year April 1, 2016 to March 31, 2017 in United States Dollars Current Year Current Year cumulative Prior Year Cumulative Disbursement Category value of Invoices financed by Cumulative value of Invoices cumulative Value of Invoices Categor r Description SCF 17143 during April 1, 2016 financed by 17143 financed by Category Number CaeoyDsrpinto March 31, 2017 Goods, works, non-consulting services, consultants' services, Training and 779,154.35 1,372,061.80 592,907.48 1) Operating Costs for Part A, B and E of the Project - (IDA-60%, SCF Grant-18% and SCF Loan- 22%) the ece ato Work, goods, non consultina ce an consultants' services for Climate 2) Adaptation Subprojects under Part C of the Project (IDA -0%, SCF Loan -100% SC1F Grant - 0%) Goods, work, non- consulting services, consultants' services and Emergency 3) Operating costs for Emergency Recovery and Reconstruction Subprojects under Part D of the Project (IDA- 100%)01.8 592,907.48 779,154.35 Note - 1: With all inflows and outflows the exchange Rate isoassuneod to be 2.6882otepjctadothbstfmknwdg I certify that the above infornmation are correct as per the record fteboso conso h rjc n otebs fm nweg Signature of the Finance IVanager :........*** ..................... Signature of the Project Coor-dinator : ............ ** *** ** . .................. 10 Government of Saint Lucia Disaster Vulnerability Reduction Project Statement of Cumulative Investment IDA Credit 54930 For the Financial Year April 1, 2016 to March 31, 2017 in United States Dollars Disbursement Category Current Year Current Year Cumulative Prior Year Cumulative Value of Invoices financed by Cumulative Value of Invoices Cumulative Value of Invoices Category IDA 54930 during April 1, 2016 financed by IDA financed by IDA 54930 Number Category Description to March 31, 2017 Goods, works, non-consulting services, consultants' services, Training and 1) Operating Costs for Part A, B and E of the 2,597,178.55 4,573,493.37 1,976,314.81 Project - (IDA-60%, SCF Grant-18% and SCF Loan- 22%) Work, goods, non consulting services and consultants' services for Climate 2) Adaptation Subprojects under Part C of the Project (IDA -0%, SCF Loan -100% SCF Grant - 0%) Goods, work, non- consulting services, consultants' services and Emergency 3) Operating Costs for Emergency Recovery and Reconstruction Subprojects under Part D of the Project (IDA- 100%) 4) Refund of Prepartion Advance 256,485.67 256,485.67 Total 2,597,178.55 4,829,979.04 2,232,800.48 Note - 1: With all inflows and outflows the exchange Rate is assumed to be 2.6882 I certify that the above infornmation are correct as per the record of the books of accounts of the project and to the best of my knowledge Signature of the Finance Manager :............. . *** ** ... Signature of the Project Coordinator :.................-. --**-**... Government of Saint Lucia Disaster Vulnerabiltiy Reduction Project Statement of Cash Balances IDA Credit 54930, SCF Grant 17143 and SCF Loan 17101 For the Financial Year April 1, 2016 to March 31, 2017 SCF Grant 17143 Opening Cash Balances Notes Total Other Receipts IDA 54930 (60%) (18%) SCF Loan 17101 (22%) Project Account (EC$) 241,815.95 129,632.62 50,480.84 61,702.89 World Bank Designated Account (US$) 1,574,447.51 1,304,198.89 156,611.69 113,636.51 Interest Earned 2,829.89 2,829.89 Sale of Tender Document Revenue 4,982.94 4,982.94 Total Opening Cash Balances 4a 1,824,076.29 7,812.83 1,433,831.51 207,092.53 175,339.40 Add: Net Receipts/Expenditures 930,446.41 513.40 594,321.42 280,393.83 55,217.76 Due to GOSL 9 17,007.62 10,177.77 3,073.43 3,756.42 Reftinded to IDA II 669.59 669.59 Net Cash Available 2,772,199.91 8,326.23 2,039,000.29 490,559.80 234,313.58 Closing Cash Balances Project Account (EC$) 314,079.37 172,871.23 63,251.55 77,956.58 World Bank Designated Account (US$) 2,449,794.30 1,866,129.07 427,308.24 156,356.99 Interest Earned 2,896.89 2,896.89 Sale of Tender Document Revenue 5,429.34 5,429.34 Total Closing Cash Balances 4b 2,772,199.90 8,326.231 2,039,000.30 490,559.80 234,313.58 I certify that the above infornmation are correct as per the record of the books of accounts of the project and to the best of my knowledge Signature of the Finance Manager :........................................... Signature of the Project Coordinator :...... .............................. 12 A. NOTES TO FINANCIAL STATEMENTS 1. Period Under Review This report captures activities undertaken by the Project during the financial year April 1, 2016 to March 31, 2017. 2. Accounting Policies The Project Coordination Unit (PCU) uses the modified cash basis of accounting to account for project transactions. Under this method Income is recognized when funds are paid to the Bank Account or a direct payment is made and expenses are recognized when payments are made or expenditure incurred. Where funds are provided by the GOSL the PCU recognizes the modified accounting basis for its transactions. 3. Financial Report The Financial Report relates to activities coordinated and the records maintained by the Project Coordination Unit during the period under review. Transactions are recorded in the accounting systems in local currency however for preparing the Financial Statements and the Interim Unaudited Financial Statements the transactions are reflected in US dollars and converted at an exchange rate of 2.6882. 4. Bank Accounts Designated Account As part of the Financing Agreement the Government of Saint Lucia is required to maintain a Designated Account which consists of two (2) bank accounts; the USD Bank Account # 901367740 and XCD Bank Account # 901367247. The Bank Accounts are held at the Bank of Saint Lucia. The USD bank account is held as a deposit account for the purpose of receipt of fLmds drawn against the Credit, Loan and Grant. Funds are transferred periodically from the USD account to the XCD account to cover eligible expenditures in the local currency. The USD account is also used to enable payments in foreign currencies. a) Opening Cash Balances The cash balance reported for the period ended March 31, 2016 was a total of US$1,824,076.75. This figure constitutes the amounts below: USD A/C #901367740 - US$1,579,304.08 (inclusive of sale of tender documents revenue of US$2,026.64 and interest earned of US$2,829.93). 13 XCD A/C #901367247 - US$244,772.67 (inclusive of sale of tender documents revenue of US$2,956.31) b) Closing Cash Balances The closing cash balances available as at March 31, 2017 expressed in US Dollars includes: USD A/C #901367740 - US$2,454,717.88 (inclusive of sale of tender documents revenue of US$2,026.64 and interest earned of US$2,896.89). XCD A/C #901367247 - US$317,482.07 (inclusive of sale of tender documents revenue of US$3,402.70). The total balance as at March 31, 2017 is US$2,772,199.95 The difference in the designated account is due to an advance made to the SLDB in the amount of US$973,067.48. The funds are being held in a CAFF Designated Account #6003035 at the 1st National Bank. 5. Sources of Funds During the period under review funds were drawn from the IDA Credit #54930, SCF Loan #TF017101 and SCF Grant #TF017143 and paid into the Designated Account # 901367740. The funds were drawn against the Withdrawal Applications as follows: 11 1,300,000.00 07/07/16 5A 707,096.46 10/11/16 5A 1,207,950.36 14/11/16 6 352,451.75 13/03/17 13 958,353.78 13/03/17 14 933,146.19 13/03/17 6 430,774.36 14/03/17 7 342,153.60 29/03/17 TOTAL $3,191,499.97 $1,980,878.32 $1,059,548.21 14 Other Receipts: Sale of Tender Documents The World Bank allows the Project to charge a nominal fee towards the cost of bidding documents. Such funds are utilized to defray printing and mailing/shipping costs associated with bidding. During the period under review US$446.40 was realized from the sale of tender document relating to the procurement of the Construction of the Dennery Polyclinic at a cost of EC$200.00 (US equivalent $74.40) per document subject to International Competitive Bidding. GOSL Bonds and Local Revenue The Government of Saint Lucia approved XCD$3,350,000 (USD$1,246,180) in estimates towards the Project. This was revised to XCD 3,000,000 (USD 1,115,988.39) and the approved allocation was XCD$250,646 (USD$93,239.34) for the fiscal year. 6. Use of Funds IDA Credit, SCF Loan and Grant Expenditures under parts A, B and E are apportioned by IDA Credit 60%, SCF Loan 22% and SCF Grant 18% while expenditures under part C is financed 100% by SCF Loan. The total expenditure for the period under review is US$4,311,851.36. The details of the expenditure are provided in Section 6a, 6b, 6c and 6d of these Notes to the Financial Statements. GOSL Funding The Government of Saint Lucia contributed USD$19,555.09 toward the compensation of affected persons to facilitate the construction of the Dennery Infant School. 6a. Component 1: Risk Reduction and Adaptation Measures IDA Credit, SCF Loan and Grant Total expenditure under this component for the fiscal year is USD$3,695,343.43 financed by the IDA Credit, SCF Loan and Grant. GOSL Funding Expenditures financed by GOSL bonds under this component is XCD$52,567.99 (USD$19, 555.09). The expenditures under this component for the period under review pertains to works, consulting services, supply of equipment, goods and other costs related to various procurement activities as detailed in the table below. 15 Advertisement- Feasibility Study Millet Intake 200.53 Courier and Advertising Charges - Supporting Water 1,028.11 Conservation and Use of Rainwater Harvesting in Saint Lucia Consultancy Services to Develop a National 92,102.48 Wastewater Management Rehabilitation of Marchand River Bank Stabilization 306,976.97 Courier Charges - Retrofitting of Piaye & Roblot 279.11 Community Centres Condition Survey of Selected Schools 31,359.27 Site Preparation - Works, Design and Supervision of 111,396.02 Dennery Polyclinic Rehabilitation of NSDC Centre 50,987.11 Design and Certification of Works for Construction 10,665.13 of Choiseul Secondary Construction of Dennery Infant School 1,313,142.26 Compensation to affected persons for the 119,555.09 Construction of Dennery Infant School Courier Charges for Procurement of Furniture for the 58.67 Ministry of Education Paid for by GOSL Bonds 16 Courier Charges- Hydraulic Assessment for Flood 59.11 Risk Reduction in Soufriere, Fond St. Jacque and Dennery Road Infrastructure along the major National 114,280.42 Highway which connects the North to the South (Highway Section at Micoud and Cannelles) Procurement of Stock of Bailey Bridges 1,442,859.99 Rehabilitation of Bois D'Orange Bridge 98,885.46 Procurement of Meteorological Workstation 34,969.99 Procurement of Motor Vehicle for Forestry 39,965.40 Department Procurement of MET Equipment 44,219.27 Advertisement- Assessment of Impact of Feral Pigs 1,908.10 on Forest Reserves, Develop Related Mitigative Plans Total 3,714,898.52 6b. Part B - Technical Assistance for Improved Assessment and Application of Disaster and Climate Risk Information in Decision Making IDA Credit, SCF Loan and Grant Total expenditure for the fiscal year is US$18,833.94 which pertains to training and other costs related to the procurement of non-consulting services. 17 Advertisements and Technical Meetings - 277.88 Strengthening of GIS Analysis Capacity Advertisements and Technical Meetings - 160.42 Bathymetric and LiDAR Survey Training of MET Officers 18,395.64 Total 18,833.94 6c. Part C: Climate Adaptation Financing Facility The International Development Association signed a Project Agreement with the SLDB dated July 16, 2014 as project implementing entity in respect to Part C of the Project. The Project Agreement requires for the SLDB to maintain a financial management system and submit audited financial statements for each period to the Bank. Therefore, the SLDB will report on the designated account and the flow of funds to that account would be verified by way of audit of the financial statements. Currently SLDB maintains the CAFF Designated Account at the 1st National Bank (account #6003035) in accordance with section 2.04 of the General Conditions, Standard Conditions for Credits and Grants which forms an integral part of the Project Agreement. SCF Loan On March 24, 2017 XCD2,615,800.00 (US$973,067.48) was transferred to the SLDB as an advance to the CAFF Designated Account held at the First National Bank and managed by the SLDB for on-lending activities. At the end of the financial year the amount owed to the Project designated account (#901367740 and # 901367247) was US$973,067.48. Expenditures paid for by the PCU for the period under review is US$1,056.48. This expenditure pertains to the advertisements of the Project Officer for the C.A.F.F. 6d. Part E: Project Management and Implementation Support Total expenditure for the period under review is US$598,475.62. An adjustment (credit) was made against office equipment for SDED in the amount of US$1,858.12. Expenditure under this Component pertains to consulting services, supply of office equipment, training and operating costs. 18 C.A.F.F Surveys 40,037.39 Programmer to enable use of Country Systems for 13,076.87 Financial Management Procurement of Computers for Accountant General 2,483.07 Department Design and Implementation of a Monitoring & 7,423.75 Evaluation System Civil Works Coordinator 58,961.39 Project Engineer 41,210.58 Office Supplies for SDED 1,807.39 Communication / Liaison Officer for SDED 25,418.13 Administrative Officer for SDED 16,430.26 Climate Change Coordinator for SDED 43,988.52 Support to Audit - Training 1,562.38 IT Consultant 5,972.03 Training Workshops 31,386.52 Support for PCU ( Staff) 230,106.36 Operating Cost 78,610.96 Total 598,475.62 7. Documentation of Eligible Expenditure During the period under review eleven (11) Withdrawal Applications as detailed below were submitted to facilitate the documentation of eligible expenditures against the IDA Credit #54930, IDA Loan SCF #TFO17101 and SCF Grant #TF017143. Application SOUrce.ofFund eriod JExpedir Value Daft Docuente (US) 4 TF17101 Jan - March 2016 89,652.39 10/11/16 5 TF17101 April- June 2016 380,127.43 14/03/17 TF17101 July -Sept 2016 252,365.64 14/03/17 6 TF17101 Oct - Dec 2016 135,468.06 29/03/17 7 2Period in which the expenditure occurred. 19 12 IDA54930 Apr - Jun 2016 1,036,711.09 08/12/16 11A IDA54930 Jan- Mar 2016 244,473.33 04/03/17 13 IDA54930 July -Sept 2016 688,308.97 14/03/17 14 IDA54930 Oct - Dec 2016 369,426.71 14/03/17 4 TF17143 Jan -March 2016 73,355.29 10/11/16 5 TF17143 April - June 2016 311013.30 10/03/17 6 TF17143 Oct - Dec 2016 206,501.52 13/03/17 TOTAL 3,787,403.73 8. Prior Year Transaction At the end of the previous financial year 2015/2016, an amount of (US$669.59) was due to the IDA by the Solar PV Demonstration and Scale-Up Project. The refund was made to the IDA on January 12, 2017. During the financial year 2016/2017 the following reclassifications were made with respect to expenditures incurred in the previous financial year. Activity Classification on FY Revised Classification in the 2015/2016 FY 2016/2017 Senior Spatial Data Collection of high resolution Strengthening of the Country's Management Consultant LIDAR data and creation of GIS analysis capacity to (inclusive of advertising and high resolution digital maintain risk and spatial data meetings) topograhic and bathymetric management systems through model for Saint Lucia technical assistance, training and procurement of equipment Water Testing Equipment Sea level rise modelling and Evaluation of coral reef coastal flood and erosion risk systems and rapid monitoring mapping methods for water quality and coral reef Pick-Up truck for Sea level rise modelling and Capacity building for Meteorological Services coastal flood and erosion risk Meterological Services, mapping including design and deployment of meteorological, hydrological and sea level rise Advertising costs for the Support to Accountant Support to MOF/PCU hiring of a Finance Manager General 20 9. Due to GOSL At the end of the financial year (USD17,074.62) XCD45,900 was due to GOSL for salaries paid for the Project in February 2017. The Project reimbursed the GOSL on June 30, 2017. 21 GOVERNMENT OF SAINT LUCIA Office of the Director of Audit Conway Business Centre, Level 3, Jn. Baptiste Street Castries, Saint Lucia W.L Tel: 758-468-1508;1510;1501 Fax: 758-468-1534 E-mail: audit@gosl.gov.ic Ref. No. GF4418-228 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROLS To: Permanent Secretary, Department of Economic Development, Transport and Civil Aviation We have audited the accompanying Statement of Sources and Uses of Funds and a summary of significant accounting policies and. other explanatory notes for the Disaster Vulnerability Reduction Project (DVRP) entered into by the World Bank and the Government of St. Lucia (GOSL) and executed by the Ministry of Finance, Economic Growth, Job Creation, External Affairs and Public Service for the financial year ended March 31, 2017 and have issued our report thereon. Our audit was guided by the International Standards of Supreme audit Institutions (ISSAI) issued by the International Organization of Supreme Audit Institutions (INTOSAI) and the World Bank's requirements, specifically the Bank's Guidelines Annual Financial Reporting and Auditing for World Bank-Financed Activities. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the project's financial statements are free from material misstatement In planning and performing our audit, we considered the Project Coordination Unit's (PCU's) internal controls over its financial reporting, by obtaining an understanding of the policies and procedures that govern internal controls, determining whether these controls had been placed in operation, and assessing control risk and performing tests of the PCU's controls in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on the internal controls. Accordingly, we do not express an opinion on the effectiveness of the PCU's internal control over financial reporting because of inherent limitations in any system of internal control, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purpose of this report we have classified significant policies and procedures relative to the PCU's internal control structure in the following categories: 1. Receipts and Disbursements of Funds 2. Cash and Bank Transactions 3. Compliance with Applicable Laws and Regulations 22 The management of the Project Coordination Unit (PCU) is responsible for maintaining effective internal control over its financial reporting. We limited our control testing to those controls necessary to achieve the following control objectives that provide reasonable, but not absolute assurance, that: (1) transactions are properly recorded, processed, and summarized to permit the preparation of the financial statements in accordance with the government's accounting policies, Note 2 and the World Bank Guidelines and (2) transactions are executed in compliance with laws and regulations that could have a direct and material effect on the financial statements. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the PCU's ability to initiate, authorize, record, process, or report financial data reliably, such that there is more than a remote likelihood that a misstatement of the PCU's financial statements that is more than inconsequential will not be prevented or detected by PCU's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the PCU's internal control. Our consideration of internal control was for the limited purpose described in the third paragraph of this report and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. Our consideration of the system of internal control would not necessarily disclose all matters in the system of internal control that might be reportable conditions, and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. We have noted no reportable conditions relating to significant deficiencies in the design and operation of the system of internal control that, in our judgment, could adversely affect the ability of the project personnel to record, process, summarize, and report financial data consistent with the assertions of management in the Statement of Sources and Uses of Funds. Though we did not discover any weakness that would be material in relation to the financial statements, we noted deficiencies involving the internal control and its operation as discussed in the attached management letter. Yvonne James DEPUTY DIRECTOR OF AUDIT Castries, Saint Lucia October 13, 2017 23 GOVERNMENT OF SAINT LUCIA Office of the Director ofAudit Conway Business Centre, Level 3, Jn. Baptiste Street Castries, Saint Lucia W.L Tel 758-468-1508;1510;1501 Fax: 758-468-1534 E-mail: audiCgosl.gov.1c Ref. No. GF4418-228 INDEPENDENT AUDITOR'S REPORT ON THE SPECIAL ACCOUNT STATEMENT TO: Permanent Secretary, Ministry of Economic Affairs, Planning, Investment and National Development We have audited the Special Account Statement of the Disaster Vulnerability Reduction Project (DVRP) financed under IDA CREDIT NO. 5493-LC, SCF-PPCR GRANT NO. TF017143 and SCF-PPCR LOAN NO. TF017101 for the year ended March 31, 2017. Our responsibility is to express an opinion on the Special Account based on our audit. We conducted our audit in accordance with the International Organization of Supreme Audit Institutions (INTOSAI) Auditing Standards and World Bank Guidelines. Those Standards and the World Bank Guidelines require that we plan and perform the audit to obtain reasonable assurance that the Special Account Statement is free of material misstatements. We believe that our audit provides a reasonable basis for our opinion. In our opinion the Special Account Statement presents in all material respects, the financial position of the Disaster Vulnerability Reduction Project (DVRP), as at March 31, 2017 in accordance with Government Accounting Policies, and the World Bank Guidelines. Yvonne James DEPUTY DIRECTOR OF AUDIT Castries, Saint Lucia October 13, 2017 "Towards Greater Accountability" 24 Desiznated Account Rcconciliation & IDACreditIDA54930,SCFCran&7I43andSCFLO梱17101 ; FortlleFinancia&earAPrill,20I6tmarcll31,2017 Ba,1^．눙IIa,)Ie.& Ba,1k硼sa,&,ltL,1ciaLttI Ba,zkAccOI,II穫 홰〃67247 ∼ 仰。欌74o (usD) A刪tNo,;IeAcc쎄tGene）떼Ie)．恥7el&ab1111xRedl,cIIOnhacl i―但 ．…， -----,,&,，蝦，,,,- ! ! l ,.-/ l Icertifs岫lheaboveich∼onare。orrec，。，。er，。。，ecOr。。，，。。。n。，,, ,,,,,，니，，」，,，土 sisnatureof轍eFinance脆∼p, . ／珊，-j0，뗘accountsof岫rojec&andtothehest。fmy。no&vIeds。 - 。：_ J , .-,.-.5& .．·…‘·．.&’차t.．갔하샀77=＝……〃．.......．。·솥｀ 。’gnature ofthe Proiect &nn『市”_+__ , 白，A / i --,&& 」 -&‘∥“네ㄷ．........．··……쌕·늬尸 ....．·……．&.... · . ! 25 ! 1 I r f l l l _, ;. �_ �_ ;- � G VEV 'NT oF SAINT LuciA 0 LNML Office of file Director ofAudit Conway Business Centre, Level 3, in. Baptiste Street Saint Lucia W-L Castries, 1. auditCagosLgov-1c Tel. 758-468-1508;1510,*1501 Ftix: 758-468-1534 E-rnai Ref No. GF4418-228 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH AGREEMENT TERMS AND APPLICABLE LAWS AND REGULATIONS TO: Permanent Secretary, Department of Economic Development, Transport and Civil Aviation We have audited the Financial Statements of the Disaster Vulnerability Reduction Project (DVRP) entered into by the World Bank and the Government of St. Lucia (GOSQ and executed by the ministry of Finance Economic Growth, Job Creation, External Affairs and Public Service, for the year ended March 1, 2017 and have issued our report thereon. we conducted our audit in accordance with the International Organization of Supreme Audit Institutions Auditing Standards (ISSAI) and World Bank Guidelines. These Standards require that 'we plan and perform the audit to obtain reasonable assurance as to whether the Financial Statements are free of material misstatements. ipliance with the terms of the loan agreement and applicable laws The PCU is responsible for corT fQ and regulations. As part of obtaining reasonable assurance as to whether the Financial StatemenM are free from material misstatements, we performed tests of the PCU's compliance with certain terms of the loan agreement and provision of laws and regulations. The results of our tests indicate that with respect to the items tested, the PCU complied, in all material respects, with the provision of the laws and regulations and terms of the loan agreement. With respect to items not tested nothing came to our attention that caused us to believe the PCU had not complied, in all material espects with relevant provisions. Yvonne James DEPUTY DIRECTOR OF AUDIT Castries, Saint Lucia October 13, 2017 "Toward,5 Greater Accountabilio, 26