THE UNITED REPUBLIC OF TANZANIA NATIONAL AUDIT OFFICE REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE BASIC HEALTH SERVICES PROJECT-IDA CREDIT NO 5029-TZ FOR THE YEAR ENDED 30TH JUNE, 2016 Cori troller and Auditor General, . ' National Audi t Office of Tanzania , Audit House, 16 Samora Machel Avenue , , P.O. Box 9080, 11101 DAR ES SALAAM Tel: 255 (022 ) 21 15157/8 Fax: 255 (022 ) 211752,7 E-mail ocag@nao.go.tz Website: www.nao.go.tz December, 2016 AR/BH SP/2015/2016 ·· :· .1: TABLE OF CONTENTS 1.0 GENERAL INFORMATION .......... ........... .. ... ................................ 1 1. 1 Mandate ............................................................. . ..... .......... 1 1.2 Vision, Mission and Core Values .................................................. 1 1. 3 Audit Objectives .................................................................... 2 1.4 Audit Scope ......................................................................... 2 1. 5 Audit Methodology ................................................................. 2 1. 6 Brief history of the establishment of Basic Health Services Project ....... 3 2.0 AUDIT REPORT ON THE FINANCIAL STATEMENTS ............................ 5 11 Office of the Controller and Auditor General ML/HBF/2015/2016 1.0 GENERAL INFORMATION 1.1 Mandate The statutory duties and responsibilities of the Controller and Auditor General are given under Art icle 143 of the Constitution of the URT of 1977 (revised 2005), Sect. 10 (1) of the Public Audit Act No.11 of 2008 and in Sect. 45 and 48 (1) of the Local Government Finances Act No. 9 of 1982 (revised 2000). 1.2 Vision, Mission and Core Values Vision To be a centre of excellence in public sector auditing. Mission To provide efficient audit services in order to enhance accountability and value for money in the collection and use of public resources. Core Values In providing quality services, NAO is guided by the following Core Values: ../ Objectivity: We are an i mpartial organization , offering services to our clients in an objective and unbiased manner; ../ Excellence: We are professionals providing the highest quality audit services based on best practices; ../ Integrity: We observe and maintain the highest standards of ethical behaviour and the rule of law; ../ People focus: We focus on our stakeholders ' needs by building a culture of good customer care and having competent and motivated work force ; ../ Innovation: We are a creative organization that constantly promotes a culture of developing and accepting new ideas from inside and ou side e organiza ·o and ../ Best resource utilisation: We are an organisation that values and uses public resources entrusted to it in an efficient, economic and effective manner. We do this by: - • Contributing to better stewardship of public funds by ensuring that our clients are accountable for the resources entrusted to them ; • Helping to improve the quality of public se rvices by supporting i nnovation on the use of public resources ; • Providing technical advice to our clients on operational gaps in thei r operating systems ; • Systematically involve our clients in the audit process and audit cycles; and • Providing audit staff with appropriate training, adequate working tools and facilities that promote their independence. © This audit report is intended to be used by Government Authorities. However, upon receipt of the report by the Speaker and once tabled in Parliament, the report becomes a matter of public record and its distribution may not be limited. Office of the Controller and Auditor General ML/HBF / 2015/2016 1. 3 Audit Objectives To obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error and are prepared in accordance with an applicable financial reporting framework; and whether laws and regulations have been complied with. 1 .4 Audit Scope The audit was carried out in accordance with the, the International Standards of Supreme Aud it Institutions (ISSAls), the agreed Memorandum of Understanding (MoU ) and other audit procedures as were deemed appropriate under the circumstances. This covered the evaluation of the effectiveness of the financial accounting system and internal controls over various activities of the Basic Health Services Project. The audit was conducted on a sample basis; therefore, the findings are confined to the extent that records , documents and information requested for the purpose of the audit were made available to me. Audit findings and recommendations arising from the exami nation of the accou nti ng records , appraisal of Basic Health Services Project activities as well as evalu ation of the Internal Control System which requires management's attention and actions, are set out in the management letter issued separately to the Permanent Secretary As an auditor, I am not required to specifically search for fraud and therefore, my audit cannot be relied upon to disclose all such matters. However, my audit was planned in such a way that I would have reasonable expectations of detecting material errors and misstatement in the financial statements r i g f irreg n · ing f a . Th r p nsibili y for de ection , prevention of irregularities and the maintenance of an effective and adequate system of internal control rests with the management BHSP. 1. 5 Audit Methodology My audit approach included tests of the accounting records and other procedures in order to satisfy the audit objectives. My audit procedures i ncluded the following: • Identify and assess risks of material misstatement, whether due to fraud or error, based on an understanding of the Fund and its environment , including the Fund's internal controls. • Obtain sufficient and appropriate audit evidence about whether material misstatements exist, through design ing and implementing appropriate responses to the assessed risks. • Form an opinion on the financial statements based on conclusions drawn from the audit evidence obtained. • Closely following -up on the implementation of the previous year's audit findings and recommendation s and i nstructions issued by Public Accounts 2 Office of the Controller and Auditor General ML/ HBF / 2015/2016 Committee (PAC) and to ensure that proper actions have been taken in respect of all audit matters raised. 1.6 Brief history of the establishment of Basic Health Services Project The Government of the United Republic of Tanzania entered into an agreement with the International Development Association (IDA), on January 17, 2012 to finance Basic Health Services Project. The project will be implemented for a period of four years to 30thJune, 2015, with total financing of special Drawing Rights (SDR) 63.10 Million , approximated to USD 100 Million. Management Structure The Basic Health Services Project IDA Credit number 5029-TZ is headed by Project manager who is assisted by project coordinator. However, the Permanent Secretary is vested with the overall responsibility of management of the day to day activities and is the Accounting Officer of the Basic Health Services Project IDA Credit number 5029-TZ. The project is jointly implemented by the ministry of health and Social welfare and Prime Minister's office Regional Administration and Local Government. The Permanent Secretaries of the two ministries are responsible for overall coordination, monitoring and supervision of activities under the project. Operational objectives of the Basic Health Services Project The objectives of the project is to assist the Government in improving the equity of geographic access and use of the basic health services across districts and enhancing the quality of health services being delivered. To achieve the objectives, the project had 3 components • Component A: Support to Local Government Services Delivery Assist Local Government Authorities in financing the operating costs of providing basic health services to the population within their respective jurisdiction and procurement of medicine, medical supplies and equipment through the medical stores department • Component B: Capacity Building in local Governments Assist in improving public financial management at local level, strengthening local level monitoring and evaluation system and improving local level management and accountability. • Component C: Central Programs to Support Local Services Delivery Involve health basket funding for central level technical assistance and interventions pertaining to public health sector financial management, 3 Office of the Controller and Auditor General ML/HBF / 2015/2016 monitoring and evaluation and non-basket funding for central project support and evaluation and health care waste management. Financial Overview The project is funded by the International Development Association (IDA) by way of credit (i.e soft loan) of SDR 63.10 million approximated to USS 100 million for the period of 4 years. 85% of the fund is expected to be disbursed through the health basket fund and 15% outside the basket. During the year under audit, the Project had total funds available of TZS. 5, 150, 180,391 for the Basic Health Service Project activities which included opening balance of TZS.3,693,067,076 Up to 30 June, 2016 the Project spent TZS.4,417,359, 156.94 equivalent to 95.79% leaving an unspent balance of TZS. 732,821 , 234.28 as summarized below: Details Amount (TZS.) Opening balance as at 1 /7 /2015 3,693,067,076 Add: Fund received during the year 1,457, 113,315.22 Total Funds available during the year 5,150,180,391 Less: Total Expenditure for the year 4,417,359,156.94 Balance carried down as at 30/06/2016 732,821,234.28 Source: Submitted financial statements 4 Of fice of the Controller and Auditor General ML/HBF/ 2015/2016 2.0 AUDIT REPORT ON THE FINANCIAL STATEMENTS To: Permanent Secretary and Accounting Officer, Ministry of Health, Community Development, Gender, Elderly and Children, P.O. Box 9083, DAR ES SALAAM. Re: REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE BASIC HEALTH SERVICES PROJECT IDA CREDIT NUMBER 5029-TZFOR THE YEAR ENDED 30TH JUNE, 2016 Introduction I have audited the Financial Statements of the Basic Health Services Project which comprises of the Statement of Financial Position, Statement of Financial Performance, Statement of changes in net assets and accounting policies, statement of Cash Flows, Statement of comparison of budget and actual amounts and notes to the Financial Statements (Statement VI) for the year ended 30th June, 2016 as shown in Annexure I of this report. Management's responsibility for the Financial Statements The preparation of the financial statements is the responsibility of the management of the Basic Health Services Project as per the Statement of Management responsibility on the Financial Statements enclosed in this report as Annexure II. S . 25(4) f he P li F' an e A . 6 f 2001 evise 2004), pla es responsibility on the Accounting Officer to prepare financial statements for each financial year, which presents true and fair view of the financial position, financial performance, and cash flows for the year then ended. It also, requires management to ensure that the reporting entity keeps proper accounting records, which will disclose with reasonable accuracy its financial position of the reporting entity and its responsibility in safeguarding the assets of the reporting entity. Responsibility of the Controller and Auditor General My responsibility as an auditor is to plan and perform the audit to obtain reasonable assurance about whether these Financial Statements are free of material misstatement, whether due to error or fraud and to express my audit opinion. I conducted my audit in accordance with the International Standards of Supreme Audit Institutions (ISSAls) and other procedures as were deemed appropriate under the circumstances. These procedures involved obtaining 5 Office of the Controller and Auditor General ML/HBF / 2015/2016 adequate and sufficient evidence, which supports 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 misstatement of the financial statements. In making those risk assessments, I considered the internal controls relevant to the Fund's preparation and fair presentation of the financial statements in order to design audit procedures but not for the purpose of expressing an opinion on the effectiveness of Fund's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as the overall Presentation of the financial statements. In addition, Sect. 10 (2) of the PAA No. 11 of 2008 requires me to satisfy myself that the accounts have been prepared in accordance with the appropriate accounting standards. Further, Sect.48 (3) of the Public Procurement Act of 2011 requires me to state in my annual audit report whether or not the auditee has complied with the provisions of the Law and its Regulations. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Unqualified Opinion In my opinion, the financial statements present fairly, in all material respects, the financial position of the Basic Health Services Project as at 30th June, 2016, its financial performance and cash flows for the year then ended in accordance with the International Public Sector Accounting Standards (IPSASs) and Project D Report on Other Legal and Regulatory Requirements Compliance with Procurement Legislation In view of my responsibility on the procurement legislation, and taking into consideration the procurement transactions I have reviewed as part of this audit. I state that the Basic Health Services Project has generally complied/not complied with the requirements of the PPA No. 7 of 2011 and its underlying Regulations of 201 . December, 2016 6 - - - - - - - - - - - - - - - - - - - -- - - -· Office of the Controller and Auditor General ML/HBF/ 2015/2016 Copy to: Chief Secretary, State House, P.O. Box 9120, 1 Barack Obama Road, 11400 DAR ES SALAAM. Permanent Secretary and Paymaster General, Ministry of Finance, P.O. Box 9111, 1 Madaraka Street 11468 DAR ES SALAAM . Country Director, World Bank, P.O. Box 2054, DAR ES SALAAM. 7 Office of the Controller and Auditor General ML/HBF / 2015/2016 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND THE CHILDREN (VOTE 52) BASIC HEALTH SERVICES PROJECT - IDA CREDIT NO. 5029 - TZ STATEMENT OF MANAGEMENT RESPONSIBILITY FOR THE YEAR ENDED 3orH JUNE, 2016 Section 25(4) of the Public Finance Act No 6 of 2001 requires the management to prepare financial statements for each financial year, which give a true and fair view of revenue and expenses of the reporting entity, as at the end of the financial year. It also requires management to ensure the reporting entity keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of the reporting entity. They are also responsible for safeguarding the assets of the reporting entity. The management accepts the responsibility for the annual financial statements, which have been prepared using appropriate accounting policies, supported by reasonable and prudent judgments and estimates, in conformity with the provisional transition to accrual basis under the International Public Sector Accounting Standard (IPSAS) and in the manner required by Section 25(4) of the Public Finance Act No 6 of 2001 as was amended in 2004. The management further accepts the responsibility for the maintenance of accounting records that may be relied upon in the preparation of financial statements as well as putting in place sound systems of internal financial control. The management is also responsible for safeguarding the assets of the reporting entity and hence, taking reasonable steps for the prevention and detection of fraud, error and other irregularities. To the best of our knowledge, the system of internal control has operated adequately, throughout the reporting period, and that, the records and underlying accounts provide a reasonable basis for the preparation of the financial statements for 2015/2016 financial year. We therefore accept the responsibility for the integrity of the financial statements, the information it contains and its compliance with the Public Finance Act No 6 of 2001, as amended in 2004 and as per instructions from the Treasury. Procurement of goods, works, consultancy, and non-consultancy services to the extent that they are reflected in these financial statements, was done in accordance with the Public Procurement Act No. 7 of 2011 Nothing has come to the attention of the management to indicate that the Ministry of Health, Community Development, Gender, Elderly and the Children will not remain a going concern, for at least the next twelve months, from the date of this statement. 02nd December. 2016 Accounting Officer Date 4 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND THE CHILDREN (VOTE 52) BASIC HEALTH SERVICES PROJECT - IDA CR. NO. 5029 - TZ DECLARATION OF THE HEAD OF FINANCE/ACCOUNTING FOR THE YEAR ENDED 30TH JUNE 2016 The National Board of Accountants and Auditors (NBAA) according to the power conferred under the Auditors and Accountants (Registration) Act. No. 33 of 1972, as amended by Act No. 2 of 1995, requires financial statements to be accompanied with a declaration issued by the Head of Finance/Accounting responsible for the preparation of financial statements of the entity concerned. It is the duty of a Professional Accountant to assist the Management to discharge the responsibility of preparing financial statements of an entity showing true and fair view of the entity position and performance in accordance with applicable International Accounting Standards and statutory financial reporting requirements. Full legal responsibility for the preparation of financial statements rests with the Management as under Management -- Responsibility statement on an earlier page. 1 t~.~.~ .... ... ~ . ~~. being the Head of Projects of the Ministry of Health, Community Development, Gender, Elderly and the Children hereby acknowledge my responsibility of ensuring that financial statements for the year ended 30th June, 2016 have been prepared in compliance with applicable accounting standards and statutory requirements. I thus confirm that the financial statements give a true and fair view position of the Basic Health Services Project being managed by the Ministry of Health, Community Development, Gender, Elderly and the Children (Vote 52) as on that date and that they have been prepared based on properly maintained financial records. Signed by: DANIEL JOHN MHANDO Position : ....... .......'::..~.~.~:~~ ..................... .. NBAA Membership No.GA 2266 Date: 02nd December, 2016 5 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND THE CHILDREN (VOTE 52) BASIC HEALTH SERVICES PROJECT - IDA CREDIT NO. 5029 - TZ COMMENTARY ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JOTH JUNE, 2016 1. Scope of the financial statements The financial statements present the results of operations of non-basket funds for central level activities managed by the Ministry of Health, Community Development, Gender, Elderly and the Children under designated account C; for the period of 1st July, 2015 to 30th June, 2016. 2. Physical implementation During the financial year ended 3Q1h June, 2016, the project received TZS 1,457,113,315.22 in cash and TZS 617,231,056.30 in kind from the International Development Association (IDA). The amount received in kind was the direct payment made by IDA to the United Nations Office for Project Services {UNOPS) to procure six motor vehicles for the project as per the Agreement signed between The Government of Tanzania and The UNOPS. The project started with a balance of TZS 3,693,067,076.00 at the beginning of the financial year 1st July, 2015 and closed with a balance of TZS 732,821,234.19 at 3Q 1h June, 2016. The total payments made during the year were TZS 4,933,382,792.29. 3. Purchase of Property, Plant and Equipment During the year ended 3Q1h June, 2016, the project procured Property, Plant and Equipment worth TZS 1, 120, 187,516.10 4. Outstanding liabilities at the end of the year. There were no outstanding liabilities at the end of the financial year 3Q1h June, 2016. 5. Exchange gains/losses The exchange gain of TZS 113,911,207.57 resulted from translation of transactions denominated in USO into TZS values for financial statements presentation. 6. Auditors The Controller and Auditor General of the United Republic of Tanzania is the Statutory Auditor of the project pursuant to the provisions of Article 143 of the Constitution of the United Republic of Tanzania of 1977 (revised 2005), Sections 26 - 37 of the Public Finance Act No. 6 of 2001 (revised 2004), the Public Audit Act No. 11 of 2008 and the Project Financing Agreement. Accounting Officer 02nd December, 2016 6 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND THE CHILDREN (VOTE BASIC HEALTH SERVICES PROJECT: IDA CR. 5029 • TZ STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30TH JUNE, 2016 2015/2016 2014/2015 TZS TZS ASSETS Current Assets Cash and cash equivalents 10 732,821,234.19 3,693,067,076.00 Receivables 11 68,049,213.00 66,300,361.00 Inventories Prepayments Total Current Assets 800,870,447 .19 3, 759,367 ,437.00 Non - Current Assets Property, Plant and Equipment 16 1,546,849,836.10 426,662,320.00 Total Non - Current Assets 1,546,849,836.10 426,662,320.00 TOTAL ASSETS 2,347, 720,283.29 4, 186,029,757.00 LIABILITIES Current Liabilities Payables 39,000,000.00 Deferred income - revenue 17 800,870,447.19 3,720,367,437.00 Total Current Liabilities 800,870,447.19 3,759,367,437.00 -C rrent Liabilities Deferred income - capital 18 1,546,849,836.10 426,662,320.00 Total Non-Current Liabilities 1,546,849,836.10 426,662,320.00 TOTAL LIABILITIES 2,347,720,283.29 4, 186,029,757.00 NET ASSETS/EQUITY Capital Contributed by: Taxpayer's funds Accumulated surplus/ (deficit) NET ASSETS/EQUITY 02nd December, 2016 Accounting Officer Date 7 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND THE CHILDREN (VOTE I;?\ BASIC HEALTH SERVICES PROJECT: IDA CR. 5029 - TZ STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30TH JUNE, 2016 (Classification of Expense by Nature) 2015/2016 2014/2015 TZS TZS REVENUE Amortization of deferred income - revenue 17 3,774,195,276.19 3,592,436,925.00 TOTAL REVENUE 3,774,195,276.19 3,592,436,925.00 EXPENSES AND TRANSFERS Wages, salaries and employee benefits 6 536,999,500.00 Grants and transfer payments Supplies and consumables used 7 3,688,024,914.19 2,980,615,628.00 Routine maintanance 8 84,542,362.00 32,308,757.00 Minor Works 9 1,628,000.00 42,513,040.00 TOTAL EXPENSES AND TRANSFERS 3, 77 4, 195,276.19 3,592,436,925.00 Surplus/(deficit) for the period 02nd December, 2016 Accounting Officer Date 8 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND THE CHILDREN (VOTE 52) BASIC HEALTH SERVICES PROJECT: IDA CR. 5029 • TZ STATEMENT OF CHANGES IN NET ASSETS/EQUITY FOR THE YEAR ENDED 30TH JUNE, 2016 Note Taxpayers Accumulated Total Funds Surplus/(Deficit) Balance at 1st July, 2014 brought forward Changes in accounting policy Restated balance Changes in net assets/equity for 201412015 Capital funds received Surplus/(deficit) for the period Balance at 30th June, 2015 carried forward Balance at 1st July, 2015 brought forward Change in net assets/equity for 2015/2016 Capital funds received Surplus/(deficit) for the period Balance at 30th June, 2016 carried forward 02nd December, 2016 Accounting Officer Date 9 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND THE CHILDREN (VOTE ., . , BASIC HEALTH SERVICES PROJECT: IDA CR. 5029 - TZ CASH FLOW STATEMENT FOR THE YEAR ENDED 30TH JUNE, 2016 (Classification of Expense by Nature) 2015/2016 2014/201 S TZS TZS CASH FLOWS FROM OPERATING ACTIVITIES Receipts Receipts from IDA 5 1,457, 113,315.22 4,774,250,247.00 Payments Wages, salaries and employee benefits 6 (497,999,500.00) Grants and transfer payments Supplies and consumables used 7 (3,688,024,914.19) (2,980,615,628.00) Routine maintanance 8 (84,542,362.00) (32,308,757.00) Minor Works 9 (1,628,000.00) (42,513,040.00) Receivables 11 (68,049,213.00) (66,300,361 .00) Payables 19 (39,000,000.00) Net cash flows from operating activities (2,424, 131, 173.96) 1, 154,512,961.00 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment 14 (502,956,459.80) (93,026,320.00) Net cash flows from Investing activities (502,956,459.80) (93,026,320.00) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings Repayment of borrowings Net cash flows from financing activities Net increase/(decrease) in cash and cash equivalents (2,927,087,633.76) 1,061,486,641.00 Cash and cash equivalents at the beginning of the period 3,693,067,076.00 2,435,090,221 .00 Inter-accounts transfer plus year end adjustments (147,069,415.62) (excluding non cash items) Exchange gain/(loss) 15 113,911,207.57 196,490,214.00 Cash and cash equivalents at the end of the period 732,821,234.19 3,693,067 ,076.00 02nd December, 2016 Accounting Officer Date 10 THE UNITED REPUBLIC OFT ANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, G ENDER, ELDERLY AND THE CHILDREN (VOTE 52) BASIC HEALTH SERVICES PROJECT: IDA CR. 5029 - TZ STATEMENT OF COMPARISON OF BUDGET AND ACT AL AMOUNTS FOR THE YEAR ENDED 30TH JUNE, 2016 (Classification of Payments by Nature) Budgeted Amounts Actual Amounts Difference: Final Budget and Actual Note Original Final RECEIPTS Ta}(eS Fees, fines , penalties and licenses Revenue from exchange transaction Receipts from IDA 5 5,884,616,389.67 5,884,616,389.67 1,457, 113,315.22 4,427,503,07 4.45 Balance at the Beginning of the year 3,693,067,076.41 3,693,-067,076.41 Inter-accounts transfer plus year end adjustments 147,069,416.03 147,069,416.03 Exchange gain/(loss) 113,911,207.57 113,911 ,207.57 Total receipts 5,884,616,389.67 5,884,616,389.67 5,117,022, 183.17 701,277, 789.58 PAYMENTS Wages, salaries and employee benefits 6 Grants and transfer payments Supplies and consumables used 7 4,378,291 ,589.67 4,378,291,589.67 3,688,024,914.19 690,266,675.48 Routine maintanance 8 103,324,800.00 103,324,800.00 84,542,362.00 18,782,438.00 Minor Works 9 1,628,000.00 (1,628,000.00) Purchase of property, plant and equipment 14 1,403,000,000.00 1,403,000,000.00 502,956,459.80 900,043,540.20 Payables 19 39,000,000.00 39,000,000.00 Total payments 5,884,616,389.67 5,884,616,389.67 4,316, 151,735.99 1,607,464,653.68 NET RECEIPTS/(PAYMEf:,ITS) 800,870,447.19 (906, 186,864.11) I ~ 02nd December, 2016 Accounting Officer Date 11 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND THE CHILDREN {VOTE 52) BASIC HEALTH SERVICES PROJECT - IDA CREDIT NO. 5029 - TZ NOTES ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 3orH JUNE, 2016 1. Basis of preparation The project financial statements have been prepared in accordance with the Public Finance Act No. 6 of 2001 (revised 2004) and comply with transitional accrual basis under the International Public Sector Accounting Standards (IPSAS). Procurement of goods, works, consultancy and non-consultancy services to the extent that they are reflected in these financial statements have been done in accordance with the Public Procurement Act No. 4 of 2004 and the World Bank procurement guidelines. The financial statements are presented in Tanzanian Shillings (TZS), which is the project's functional and presentation currency. 2. Authorization date The financial statements were authorized for issue on ...... 02nd December, 2016 by Accounting Officer 3. Reporting entity The financial statements are for the Basic Health Services Project - IDA Credit number 5029 - TZ. 4. Summary of si nificant a c nting policies Transactions and balances Foreign currency transactions are translated into Tanzania shillings using Bank of Tanzania exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from translation of year-end monetary assets and liabilities denominated in foreign currencies are recognized in the statement of financial performance. 12 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND THE CHILDREN (VOTE 52) BASIC HEALTH SERVICES PROJECT - IDA CREDIT NO. 5029 - TZ NOTES ON THE FINANCIAL STATEMENTS - continues FOR THE YEAR ENDED JOTH JUNE, 2016 Summary of significant accounting policies - continues Cash and cash equivalents Cash and cash equivalents in the statement of financial position comprise cash at banks in the project bank accounts. Revenue from non-exchange transactions Revenue is recognized to the extent that it is probable that the economic benefits will flow to the entity and that the revenue can be measured reliably. Credit amount received for acquiring non-current assets are recognized as deferred income in the statement of financial position and transferred in the statement of financial performance on a systematic and rational basis over the useful lives of the related assets. Other Credit amounts received are recognized as revenue over the periods necessary to match them with the expenses for which they are intending to compensate, on a systematic basis. Property, plant and equipment Property, plant and equipment are stated at cost in the statement of financial position. For financial year ended 3Qth June, 2016, no depreciation has been charged . The Government has adopted the provisions of section 95 of IPSAS 17 Property, Plant and Equipment. For this reason, for a five-year period following the date of first adoption of accrual accounting in accordance with the International Public Sector Accounting Standards, the Government is not required to comply full with the recognition and measurement requirements of IPSAS 17 Property, Plant and Equipment. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from de-recognition of the asset is included in the statement of financial performance in the year the asset is derecognized. 13 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND THE CHILDREN (VOTE BASIC HEALTH SERVICES PROJECT: IDA CR. 5029 • TZ NOTES ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE, 2016 2015/2016 2014/2015 TZS TZS 5 Receipts Receipts from IOA USO NC 1,457, 113,315.22 4,774,250,246.64 Receipts from JOA Tsh A/C Total 1,457, 113,315.22 4, 77 4,250,246.64 6 Wages, salaries and employee benefits Salaries 536,999,500.00 536,999,500.00 7 Supplies and Consumable used Consultancy services 928, 187,969.60 509,643,245.72 Per - Diem Domestic 1,781,338,740.00 1,264,877,488. 76 Per - Diem Foreign 15,334,810.00 125,037,642.04 Ground Transport 9,060,000.00 37,717,523.66 Air Tickets 16,159,438.53 167,726,232.63 Conference Hall Charges 83, 792,000.00 313,662,500.00 Printing 94,495,939.80 13,417,950.00 Stationaries 64,608,409.84 83,817,375.00 Refreshments 146,658, 700.00 63,018,673.00 Diesel 262,849,742.10 181 ,049,634.00 Communication 26,887,201 .07 34,388,489.57 Tuition Fees 41 ,820,000.00 121, 789,632.75 Learning Materials 1,600,000.00 32,400,000.00 Training allowance 24,600,000.00 Advertisements 1,532,962.54 5,282,817.56 Hospital Supplies 212, 170,000.00 Bank Charges 1,529,000.71 2, 186,423.46 Total 3,688,024,914.19 2,980,615,628.15 8 Routine maintenance Vehicle Maintanance 84,542,362.00 32,308,756.56 Total 84,542,362.00 32,308,756.56 9 Minor works Minor works 1,628,000.00 42,513,040.00 Total 1,628,000.00 42,513,040.00 14 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND THE CHILDREN (VOTE BASIC HEALTH SERVICES PROJECT: IDA CR. 5029 • TZ NOTES ON THE FINANCIAL STATEMENTS • continues FOR THE YEAR ENDED 30TH JUNE, 2016 2015/2016 2014/2015 TZS TZS 10 Cash and cash equivalents Bank Balance in project USO Account (BOD 724,687,588.32 1,165,722,943.00 Bank Balance in project TZS Account (SCB) 8, 133,645.87 2,527,344, 133.00 Total 732,821,234.19 3,693,067,076.00 11 Receivables Outstanding imprests 55,296,950.00 Advances to Regions 68,049,213.00 11,003,411.00 Total 68,049,213.00 66,300,361.00 12 Inventories 13 Prepayments Tuition Fees Training Allowances Total 14 roperty, m nt Direct procument by the Project) Buildings Plant and Machinery 78,599,999.1 0 Motor Vehicles IT Equipment 375,227,300.70 93,026,320.00 Furnitures and Fixtures 17,741,200.00 Office Equipment 31.387.960.00 Total 50219561459.80 9310261320.00 15 Exchange Gain/Loss Exchange Gain/Loss 113,911 ,207.57 196.490,214.00 Total 11319111207.57 196.4901214.oo 15 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND THE CHILDREN (VOTE 52) BASIC HEALTH SERVICES PROJECT: IDA CR. 5029 - TZ NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED JOTH JUNE, 2016 16Property, Plant and Equipment Buildings Plant and Motor Computer Furniture and Office Total Machinery vehicles Equipment Fixtures Equipment TZS TZS TZS TZS TZS TZS TZS 30th June 2015 Cost At 1 July 2014 275,946,000.00 57,690,000.00 333,636,000.00 Additions 93,026,320.00 93,026,320.00 Trar.sfers (add/deduct) Disposal At 30th June 2015 275,946,000.00 150,716,320.00 426,662,320.00 Depreciation At the beginning of the year Charge for the year At the end of the year Net Book Value 275,946,000.00 150,716,320.00 426,662,320.00 30th June 2016 Cost At 1 July 201 S 275,946,000.00 150,716,320.00 426,662,320.00 Additions: Direct procurement by the 14 78,599,999. 10 375,227,300.70 17,741,200.00 31,387,960.00 502,956,459.80 Project Indirect procurement 617,231,056.30 617,231 ,056.30 through UNOPS Transfers (add/deduct) Disposal At 30th June 2016 78,599,999.10 893,177,056.30 525,943,620.70 17,741,200.00 31,387,960.00 1,546,849,836.10 Depreciation At the beginning of the year Charge for the year At the end of the year Net Book Value 78,599,999.10 893, 177,056.30 525,943,620. 70 17,741,200.00 31,387,960.00 1,546,849,836.10 16 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND THE CHILDREN (VOTE ...... BASIC HEALTH SERVICES PROJECT: IDA CR. 5029 • TZ NOTES ON THE FINANCIAL STATEMENTS - continues FOR THE YEAR ENDED 30TH JUNE, 2016 2015/2016 2014/2015 TZS TZS 17 Deferred Income - Revenue Balance at the beginning of the year 3,720,367,436.72 2,435,090,220.95 Income received during the year 1,457, 113,315.22 4,774,250,246.64 Exchange gain 113,911,207.57 196,490,213.84 Less: Capital expenditure (502,956,459.80) (93,026,320.00) Inter-accounts transfer plus year end (213,369,776.34) adjustments (including non cash items) Total 4,575,065,723.37 7,312,804,361.43 Amortisation of Deferred Income Revenue expenditure (3,774, 195,276.19) (3,592,436,924. 71) Balance at the end of the year 800,870,447.19 3, 720,367 ,436. 72 Represented By: Cash and bank balance 732,821 ,234.19 3,693,067,076.41 Advances 68,049,213.00 66,300,360.76 800,870,447 .19 3,759,367,437.17 18 Deferred Income - Capital Balance at the beginning of the year 426,662,320.00 333,636,000.00 Income received during the year 1,120,187,516.10 93,026,320.00 Recategorization of income to revenue Income amortized during the year Balance at the end of the year 1,546,849,836.10 426,662,320.00 19 Payables Salaries 39,000,000.00 Total 39,000,000.00 17 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY ND THE CHILDREN (VOTE 52) BASIC HEALTH SERVICES PROJECT: IDA CR. 5029 • TZ STATEMENT OF PHYSICAL PERFORMANCE FOR THE YEAR ENDED 30TH JUNE, 2016 CENTRAL LEVEL SUPPORT Support to administrative costs of the project 123,866,307.00 137,321 ,711.06 (13,455,404.06) Done 2 Capital support to smooth running of the Project in support of implementation of the 810,000,000.00 786,355, 155.00 23,644,845.00 The balance used for other project inciudign RBF activities 3 Capacity building of officers on advanced computer skills 13,000,000.00 13,000,000.00 Funds not used, reallocated and used for other activities 4 Training of Administrative staff of the project 41,600,000.00 60,310,000.00 (18,710,000.00) Done 5 To support officers to attend national and internatinal conferences 48,700,000.00 27,249,648.53 21,450,351 .47 The balance used for other activities 6 1 BHSP Quarterly monitoring and reporting meetings 16,500,000.00 12,832,000.00 3,668,000.00 Done 7 M&E external evaluation 50,000,000.00 89,000,000.00 (39,000,000.00) Done 8 Result framework review 26,900,000.00 12,954,000.00 13,946,000.00 The balance used for other activities 9 Conduct working sessions to prepare final BHSP monitoring and evaluation report 20,960,000.00 15,992,000.00 4,968,000.00 Done HEALTH CARE WASTE MANAGEMENT 10 Support HCWM Programme with Air pollution sampler and analyser equipments 11,000,000.00 14,396,000.00 (3,396,000.00) Done 18 11 Support 3 Pilot Regional Hospitals, 5 district hospitals, 10 Health Centres and 10 224,970,000.00 221 ,770,000.00 3,200,000.00 Done Dispensaries (28 Health Facilities) with specialized HCWM equipments for segregation, collection and disposal facilities in Shinyanga, Manyara and Ruvuma regions by 2016 12 Disseminate Public Health (Healthcare Waste Management Regulation), National 22,080,000.00 22,080,000.00 - Done guidelines and national Catalogue for healthcare waste management to all key stakeholders both Publlic and Private by 2016. 13 Follow up and Supportive on site demonstration of best practices in 6 hospitals of 19,230,000.00 19,230,000.00 - Done Manyara, Shinyanga and Ruvuma Dodoma, Mwanza, Sengerema, through training, planning, and practicing with HCWM supplies and equipment for segrega 'on, collection and disposal equipment. 14 Facilitate printing of the Revised National Policy Guidelines, regulations N tional 15,754,900.00 11,584,640.00 4, 170,260.00 The balance used for other Catalogue for Healthcare Waste Management and Disposal Method at all levels activities 15 Finalize a 5 year National Action Plan for Healthcare Waste Management for 2016- 20,360,880.00 20,360,000.00 880.00 Done 2020 16 Support the installation of Medical Waste Incinerators in 6 highly need regional, and 525,000,000.00 78,599,999.10 446,400,000.90 The contract is yet to be district hospitals of (Mwanza - Soukotoure), Manyara (Babati TC, Ruvuma (Songea finalised regional ), Dodoma (Regional hosp:tal Shinyanga (Regional hospital) and Sengererna District Hospital by April 2016 ~p · - -~:~.,-- =,@'ffifWm~ ~:- ,;t{·J~f ,!.-~:;l~tt;\... 7""''m,'if'"""·<:>.·,c-~-..-,·r.··~·:'"'"~-~" ·3r~ ""~--~~'~m:Jt· ~~~~~,t ~-.,,,·,:·~·"'"· 1 t1~1o./:;~:J H;,;:.t~.. ~""' ,;;;·)~ff~~~·~·:· ~~.~~·.::;.:.c~;;(,..}" . ~·,.:..,:~.:J;;:~J;t~,,~.'~j,;.'Si:~.l.,,~;-;~1:;;,t®llci-: 1 Id,;.:, r::r~· -;·_: ~ ~i.J[,,,.:;_.~,:~ 1tl ....... ~ .. ~s=°!:z.~ •. ,. '-.:.. !: ..1 ~:ti~.;.-~'::..~ , ~~ iillz.;~~L~7.:.:J JL ....s..;,,.,__~..;;;'..:..:~~'--~[i~};t,~:;_ · .,:.;..~,ii...\,t~.<\.:U ~~':."1 REGIONAL SUPPORT 17 In collaboration with Zones conduct S.S to new regions to follow up implementation 63, 120,700.00 56,390, 700.00 6,730,000.00 The balance used for other of RMSS to Hosp and CHM activities 18 To prepare summary and analysis of RHMT plans (annual) and progre s reports 25,280,000.00 24,750,000.00 530,000.00 Done (quarterly) SOCIAL ACCOUNTABILITY 19 RoUing out Community Score Card in health facilities of 4 Councils · 62,560,000.00 62,560,000.00 Done 19 20 Rolling out Community Score Card in health facilities and sensitisation of HSBs 211 ,600,000.00 211,600,000.00 Done and FGCs in the 10 councils 21 Conduct stakeholders sensitization meeting on roles and responsibilities of CHSBs 394,500,000.00 319,704,600.00 74,795,400.00 The balance used for other and HFGCs in the 168 Councils. activities PUBLIC FINANCE MANAGEMENT 22 Develop and rollout of the Hospital Management Information System for two 440,000,000.00 176,239,000.00 263, 761,000.00 The contract is yet to be regional referral hospitals. finalised 23 To engage a consultant to conduct a feasibility study and requirement an lysis for 246,261, 157.82 244,750,895.19 1,510,262.63 Done the development and implementation of the Health Sector Resource Data Warehouse (HRDW) 24 Support Accounting Staff to pursue professional course CPA(T) 57,600,000.00 31 ,950,000.00 25,650,000.00 The balance used for other 25 Support Ministry's Accountants and Internal Auditors to attend International 14,400,000.00 17 ,090,000.00 (2,690,000.00) Done Accounting Conference 26 Support implementation of the Health Financing Strategy 25,000,000.00 25,000,000.00 Funds not used, reallocated and used for other activities 27 Finalise and disseminate cost sharing guideline to all regions and CHF guidelines 121,250,000.00 74,001 ,000.00 47,249,000.00 The balance used for other activities (2_iil."-~~ "' >-o ,:,· . , ~ ~ · · ~ ; . - ~ • ·-·, -•.• ·y~.,- - ,.,.~-x"..,.,..~s·· ,!i-i;i'?J~~i,i7,/-;J•1:~ ,):"'/· . ::;::'°,\;•~!-;;•1~ ?,.:,:;;~! --- - ~•,',.,,• •.. ~f'''*ff"fllm~l-~1~~~ ~\~ :•: f .. .-1 ·-~,· .. -.,,, __ :.. ,>"7"-~,~·,w~i ' -."it'2 . ..... •_. ~ i. "':" '•\ ~_.. ~i ,.__,il"b •. """•~-J.. . .:~.\~1tJ.tl.!\1"'..:11 ·~,·'::..·•~,- ..... 1..1. ... : .......v ......J-~>,~,.- ... .A ,1.u .. ., ...... ,,. .. lt:;(:._,.. .1:c:....,.,..t- .......... ," ...• ,i,:.i,. ... .. f • ..,..;-i,:i,~d~•~--~f'r1,, . .._\,it ,~...:~...:-::~-. ,;~i::t.,Q. ;!:w DISTRICT HEALTH SERVICES 28 To conduct quality assurance for Technical CCHP plans and prepare summary 60,291,200.00 60,290,000.00 1,200.00 Done analysis of annual CCHPs plans and progress reports ( Re avaluate the Meso Plan) 29 To conduct Technical backup and follow-up (Coaching & Mentoring) to RHMT and 45,500,000.00 50,486,000.00 (4,986,000.00) Done LGA implementation on CCHP/ PlanRep3 and PlanReP3 Health Meso focus on poorly performing districts both in Plans and Reports. 30 To attend a two weeks course for Improving the Quality of Health Se ices in a 28,980,000.00 28,962,500.00 17,500.00 Done Dencentralised district Health System. 31 To Review and Tran slate in Kiswahili the Ternplate for developing Annual Health 18,889,383.40 18,841,383.00 48,000.40 Done Plans for Health Centre and Dispensaries 2009 20 32 To developing a Web based PlanRep and link with DHIS, HIRHS database system 631 ,619,840.00 631,619,840.00 Done as to improve PlanRep 3 (all levels) and support MOHSW in training of CHMTs for 1 year 33 Procurement of a Web based PlanRep Main saver, Back up Saver, Rack cabinet 60,000,000.00 54,111,720.41 5,888,279.59 Done and UPS (including back up) database system for data processing from the LGA STAR RATING ASSESSMENT 34 To conduct star rating assessment in Dodoma, Lindi, Manyara, Mtwara, Morogoro, 1,387,842,021.45 1,340,000,000.00 47,842,021.45 The balance used for other Ruvuma and Tanga regions activities 21