Youth Opportunities Project (YOP) Implemented by the Government of Liberia through Ministry of Youth and Sports (MYS), Liberia Agency for Community Empowerment (LACE) & Ministry of Gender, Children & Social Protection (MGCSP) Audit Report and Financial Statements For the Nine (9) Months Ended June 30, 2017 CONTENT: Page: 1. Independent Auditor's Report 3. Balance Sheet 4. Statement of Receipts and Payments 5. Notes to the Financial Statements 9. Independent Auditor's Report on the Special Account Statement 11. Special Account Reconciliation 12. Management Letter Clearance Youth Opportunities Project/ AYS June2017 Independent Auditor's Report TO: The Donor of the Project International Development Association (IDA) We have audited the Financial Statements of the Youth Opportunities Project (YOP) implemented by the Government of Liberia through the Ministry of Youth and Sports (MYS), the Liberian Agency for Community Empowerment (LACE) and the Ministry of Gender, Children & Social Protection (MGCSP) which comprise the Balance Sheet as at June 30, 2017 and the related statement of Receipts and Payments for the Nine (9) months then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Public Sector Accounting Standards (IPSAS) - Cash Basis and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. Our audit was conducted 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 about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by 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. Opinion In our opinion, the financial statements referred to above present fairly in all material respects, the financial position of the Youth Opportunities Project implemented by the Government of Liberia through the Ministry of Youth (MYS) and Sports, the Liberian Agency for Community Empowerment (LACE) and the Ministry of Gender, Children & Social Protection (MGCSP) as at June 30, 2017 and the results of its operations for the Nine (9) months ended, as well as for the, credit received and expenditures made by the Project for the period ended in accordance with International Public Sector Accounting Standards (IPSAS) - Cash Basis. PKF-Lib ria Account nts & A I business advisors Monrovia 3 Youth Opportunities Project Balance Sheet As at June 30, 2017 Amount US$ Assets Cash and cash equivalents 494,297 Total Assets 494,297 Fund Balance Balance brought forward - Excess of receipt over expenditure 494,297 Accumulated Fund Balance 494.297 Papin D iels, CPA, CA Jse u Director Donor Financed Projects Natio al C6ordinator PFMU Youth Opportunities Project Ministry of Finance & Development Planning Ministry of Youth & Sports 4 Youth Opportunities Project Statement of Receipts and Payments For the Nine (9) months ended June 30, 2017 Budget Actual Variance US$ US$ US$ Receipts IDA Credit No. 56210 4,007,681 826,786 3,180,895 Payments Pre-Employment Social Support & Household Enterprises for Urban Youth 207,542 - 207,542 Productive Public Works & Life Skills Support 1,644,845 - 1,644,845 Capacity Building for Cash Transfer Program 885,200 - 885,200 Project Implementation & Coordination 1,270,095 332,489 937,606 Total Payments 4,007,681 332,489 3,675,192 Excess of Receipts over Payments - 494,297 494,297 The notes on pages 5 to 8 form an integral part of these financial statements 5 Youth Opportunities Project Notes to the Financial Statements For the Nine (9) Months Ended June 30, 2017 1. General background of Project Financial Management Unit (PFMU) 1.1 The Government of Liberia has finalized arrangement with various institutional donors to finance a program of rehabilitation and reconstruction of the vital sectors of the economy. The Government has established a Project Financial Management Unit (PFMU) that is responsible for providing centralized accounting, disbursement and reporting services for donor funded projects and programs that are being and shall be executed by the Government of Liberia. The responsibility for the establishment and maintenance of a financial management system for projects and programs rest with the Government of Liberia through the Project Financial Management Unit (PFMU) in the Ministry of Finance and Development Planning and implementing units of the sector ministries implementing the project. 1.2 The Project Financial Management Unit (PFMU) has been established in the Ministry of Finance and Development Planning with appropriate financial management staff to ensure that: (a) All aspects of financial management required under each project/program are carried out; (b) payments are processed expeditiously on behalf of the implementing units; (c) adequate internal controls are in place; (d) quarterly financial monitoring reports are prepared on a timely basis; (e) the financial information required by the implementing units are prepared on a regular basis and on time; (f) the annual financial statements are prepared on a timely basis; (g) and the annual external audit is completed on time and audit findings and recommendations are implemented expeditiously. 6 Youth Opportunities Project Notes to the Financial Statements For the Nine (9) Months Ended June 30, 2017 1.3 General 1.3.1 The "Youth Opportunities Project" is funded 100% by the International Development Association (IDA). The purpose of the credit is to improve access to income generation opportunities for targeted youth and strengthen the Recipient's capacity to implement its cash transfer program. 1.4 The Project Partnership, Objective, and Goals This reporting period for the Project was implemented by the Ministry of Youth & Sports (MYS), the Liberian Agency for Community Empowerment (LACE) and the Ministry of Gender, Children & Social Protection (MGCSP). The overall purpose of the project were: a. To strengthen the capacity of Ministry of Youth & Sports (MYS) for Project management, coordination, monitoring and evaluation, including, inter alia, financial and procurement management; b. Strengthen the capacity of Liberian Agency for Community Empowerment (LACE) for project management, coordination, monitoring and evaluation, including inter alia, financial and procurement managements, reporting and auditing; c. Strengthen the capacity of Ministry of Gender, Children & Social Protection (MGCSP) for Project management, coordination, monitoring and evaluation, including inter alia, financial and procurement managements, reporting and auditing. 2. Significant accounting policies 2.1 Basis of accounting and reporting 2.1.1 The financial statements have been prepared in accordance with International Public Sector Accounting Standards (IPSAS) - Cash Basis and in the manner required by the Project financing Agreement as required by the foundation and the Project Financial Management Procedures Manual. 2.1.2 International Public Sector Accounting Standards (IPSAS) - Cash Basis recognizes revenue only when cash is received whilst expenditures are recognized when payments are made. 7 Youth Opportunities Project Notes to the Financial Statements For the Nine (9) Months Ended June 30, 2017 2.3 Currency of reporting 2.3.1 These financial statements are expressed in United States Dollars. Cash and near cash items denominated in other currencies, are translated to United States dollars at the applicable year-end rates. Transactions occurring in other currencies during the year are brought into the books of account at the prevailing rates of exchange on the dates of the respective transactions. Gains or losses arising from foreign currency transactions are reflected in expenditures for the period in which they arise. 2.4 Long-term assets 2.4.1 Long-term assets represent expenditures incurred in capital works and acquisition of property and equipment. These assets are recorded at. historical cost and expensed on acquisition. A comprehensive assets register is maintained to account for and monitor the existence of such assets while in continuous use. No depreciation is charged. 2.5 Credit 2.5.1 Credit income is recognized when received and credited to a separate account maintained by the administrator of the Project to which it relates. 8 fouth Opportunities Project \Jotes to the statement of Receipts and Payments :or the Nine (9) months ended June 30, 2017 Budget Actuals Variance $US $US $US Pre-Employment Social Support & Household Enterprises for Urban Youth Pre-employment Social Support 207,542 - 207,542 Household Enterprise - - Capacity & Systems Building - - _ 207,542 - 207,542 Productive Public Works & Life Skills Support Productive Public Works & Life Skills Support 1,574,445 - 1,574,445 Capacity & Systems Building 70,400 - 70,400 1,644,845 - 1,644,845 Capacity Building for Cash Transfer Program Capacity Building for Cash Transfer Program 885,200 - 885,200 885,200 - 885,200 Project Implementation & Coordination Ministry of Youth & Sports (MYS) 419,545 321,246 98,299 Liberia Agency for Community Empowerment (LACE) 373,550 2,520 371,030 Ministry of Gender, Children & Social Protection (MGCSP) 477,000 8,723 468,277 1,270,095 332,489 937,606 9 Independent Auditor's Report on the Special Account Statement TO: The Donor of the Project International Development Association (IDA) We have audited the accompanying Project Special Account Statement of the Youth Opportunities Project (YOP)" implemented by the Government of Liberia through the Ministry of Youth and Sports (MYS), the Liberian Agency for Community Empowerment (LACE) and the Ministry of Gender, Children & Social Protection (MGCSP) for the nine months ended June 30, 2017. Management's responsibility for the Special Account Statement The statement is the responsibility of the Project Financial Management Unit, Ministry of Youth and Sports (MYS), the Liberian Agency for Community Empowerment (LACE) and the Ministry of Gender, Children & Social Protection (MGCSP). This responsibility includes: designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the Special Account Statement that is free from all material misstatements, 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 the Project Special Account Statement based on our audit. Our audit was conducted 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 about whether the financial statements are free from material misstatement. 10 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by 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. Opinion In our opinion, the Project Special Account Statement has been prepared, presented and properly accounted for and withdrawals were made for the purpose of the Youth Opportunities Project (YOP) implemented by the Government of Liberia through the Ministry of Youth and Sports (MYS), the Liberian Agency for Community Empowerment (LACE) and the Ministry of Gender, Children & Social Protection (MGCSP) for the Nine (9) months ended June 30, 2017. PKF-Libe ia Accountants & Business advisors Monrovia 11 Youth Opportunities Project Special Account Reconciliation For the Nine (9) months ended June 30, 2017 Amount $US Opening Balance IDA Credit No. 56210 826 786 826,786 Payments by Category Pre-Employment Social Support & Household Enterprises for Urban Youth - Productive Public Works & Life Skills Support Capacity Building for Cash Transfer Program - Project Implementation & Coordination 332,489 Total Payments 332,489 Closing Balance as at June 30, 2017 494.297 12 Youth Opportunities Project (YOP) Implemented by the Government of Liberia through Ministry of Youth and Sports (MYS), Liberia Agency for Community Empowerment (LACE) & Ministry of Gender, Children & Social Protection (MGCSP) Management Letter Clarence For the Nine (9) Months Ended June 30, 2017 February 27, 2018 TO: The Donor of the Project International Development Association (IDA) Dear Sir: Management Letter Clearance In connection with our audit of the Project "Youth Opportunities Project" implemented by the Government of Liberia through the Ministry of Youth and Sports (MYS), the Liberian Agency for Community Empowerment (LACE) and the Ministry of Gender, Children & Social Protection (MGCSP), as at June 30, 2017; we confirm that no matters came to our attention during the course of the audit that we considered significant enough to warrant the issuance of a separate management letter. PKF-Libe ia Accountants & business advisors