, THE WORLD BANK PCB/POP MANAGEMENT PROJECT) (FEDERAL MINISTRY OF ENVIRONMENT) AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 315 r DECEMBER, 2015 BY OFFICE OF THE AUDITOR-GENERAL FOR THE FEDERATION Plot 273, Central Business District, ... ' Abuja .. _ NIGERIA-POLYCHLORINATED BIPHENYL (PCB) MANAGEMENT PROJECT (FEDERAL MINISTRY OF ENVIRONMENT) ...,. AUDITED FINANCIAL STATEMENTS 51 • FOR THE PERIOD ENDED 31 DECEMBER, 2015 (January to December, 2015) BY OFFICE OF THE AUDITOR-GENERAL FOR THE FEDERATION Plot 273 Samuel Ademulegun Street, Central Business District, Abuja. 1 To: Management Committee of the PCB/POP Management Project REPORT OF THE INDEPENDENT AUDITORS ON THE FINANCIAL STATEMENTS OF THE PCB/POP MANAGEMENT PROJECT FOR THE YEAR ENDED 31sT DECEMBER, 2015. We have audited the accompanying financial statements of the PCB/POP Management Project for the year ended 31st December, 2015. These financial statement comprise the statement of financial position and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information on the statements. Management Committee's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the International Public Sector Accounting Standards (IPSAS) and legislation, 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 oprn1on on these financial statements based on our audit. We conducted our audit in accordance with International Standards for Supreme Audit Institutions (ISSAis). These 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 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, 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 1s sufficient and appropriate to provide a basis for our audit opinion. Opinion .. In our opinion , the financial statements present fairly , in all material respects , the financial position of PCB/POP Management Project as at 31 st December, 2015 and of its financial performance and its cash flows for the yea r then ended in accordance with IPSAS. The Statements of Expenditures (SOEs) are in agreement with the Books of Accounts and adequate supporting documentation was maintained to support the claims to the World Bank for reimbursements of expenditure and wh ich were eligible for financing under the financing agreement. RS.) Ag . Auditor-General for the Federation Office of the Auditor-General for the Federation , Audit House, Plot 273 , Samuel Ademulegun Street, Central Business District, P.M.B. 128 Garki , Abuja . 17th June, 2016 NIGERIA-POLYCHLORINATED BIPHENYL (PCB) MANAGEMENT PROJECT FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 31 5T DECEMBER. 2015. Contents Page Project Information/Profile 2 Statement of Accounting Policies 4 Report of the Auditors 5 Statement of Financial Performance 7 Statement of Financial Position 8 Statement of Changes in Net Assets/Fund 9 Statement of Cash Flow 10 ' Notes to the Financial Statements 12 ...,. • 2 NIGERIA-POLYCHLORINATED BIPHENYL (PCB) MANAGEMENT PROJECT PROJECT INFORMATION/PROFILE FOR THE PERIOD ENDED ON 31ST DECEMBER. 2015. PROJECT BACKGROUND The Nigeria Polychlorinated Biphenyl (PCB) Management Project is a four-year program initiated in February 2012. The project is being funded with grant from the Global Environment Facility (GEF) and with government counterpart funding. The development and global environment objective of the project is to strengthen national capacity for management of Persistent Organic Pollutants (POPs) and in particular, Polychlorinated Biphenyls (PCB) as required under the Stockholm Convention on Persistent Organic Pollutants. To track progress towards the Project Development Objective (PDO), the key project outcome indicators are: a] a national POPs/PCB policy adopted by Government and b] a national PCB management plan is adopted and implemented by Government. The project consists of four major components: (1) capacity-building for POPs and PCB management; (2) environmentally sound management of on- line and off-line electrical equipment; (3)national baseline inventory of PCB and PCB containing equipment and development of national PCB management action plan; and (4) project management and monitoring and evaluation. PRINCIPAL OFFICERS OF THE PROJECT 1. Stella Uchenna Mojekwu (Mrs) - National Project Coordinator 2. Yusuf Babatunde Adebola - Monitoring & Evaluation Officer 3. Dauda Musa - Environmental Officer 4. Abdulganeey Oladele Opeloyeru - Procurement Officer 5. Razaq Lukman Babatunde -Internal Auditor 6. Sylvanus E. Onoh -Project Accountant AUDITORS Office of the Auditor-General for the Federation Plot 273, Samuel Ademulegun Street,Central Business District, P.M.B. 128, Garki, Abuja. Web site: ~~ ,, ' u; __ _ e-mail: . ~~:_.., ~~':4l.!...·' '..t 3 PROJECT HEAD OFFICE 18, Mao-Tse Tung Street, ..- Off Jimmy Carter Street, Asokoro, Abuja. e-mail: .... ' - . ,raly..Jf'rlQ.((.ln - -- ~ PROJECT FINANCIERS Global Environmental Facility (GEF) Federal Government of Nigeria (FGN) RESPONSIBLE AGENCY Federal Republic of Nigeria Federal Ministry of Environment Ahmadu Bello Way, ...,.. Central Business District, P.M.B. 14, • Abuja . INTERNATIONAL IMPLEMENTATION AGENCY World Bank BANKERS First Bank Pic. No. 14, Aguiyi lronsi Street, Maitama, Abuja. 4 NIGERIA-POLYCHLORINATED BIPHENYL {PCB) MANAGEMENT PROJECT STATEMENT OF ACCOUNTING POLICIES FOR THE PERIOD ENDED ON 31ST DECEMBER. 2015. The following is the summary of the significant Accounting Policies adopted in the preparation of the project's Financial Statement. These policies have been consistently applied to all through year: 1. BASIS OF PREPARATION The Financial Statements have been prepared under the in accordance with International Public Sector Accounting Standards {IPSAS) financial reporting under the cash basis of accounting. Cash basis of accounting recognizes transactions and events only when cash (including equivalents) is received or paid by the entity . . ·• 2. PRINCIPAL ACTIVITIES .. The project is principally engaged in capacity building for sound PCB management, design, development and implementation of environmentally sound management for on-line and off-line electrical equipment baseline national inventory of PCB and development of national PCB management action plan; and project management and monitoring and evaluation. The project does not have profit motive. 3. ACCUMULATED FUND All contributions by the two financiers -GEF and FGN- were only recognized when received and capitalized as accumulated fund . The fund is subsequently increased or reduced by surplus or deficit from the statement of financial performance. 4. RECOGNITION OF INCOME & EXPENDITURE Income is recognized only when received. Expenditures are recognized when they become payable or incurred. 5 5. NON-CURRENT ASSETS (a) Non-current assets acquired during the year were stated at - cost. (b) Depreciation: No depreciation was provided on the non- current assets. (c) In the opinion of the principal officers, the non-current assets will be transferred to the Implementing Agency (Federal Ministry of Environment) at the end of the Project's life at the cost. 6. REPORTING & FOREIGN CURRENCY The reporting currency is the Nigerian Naira {:N). Transactions in foreign currencies are recorded in Naira at the rates of exchange ruling at the 'VII'" dates of transactions. 6 NIGERIA-POLYCHLORINATED BIPHENYL (PCB) MANAGEMENT PROJECT 51 STATEMENT OF FINANCIAL PERFORMANCE FOR THE PERIOD ENDED ON 31 DEC .. 2015. 2015 2014 (Notes) N= ~ Receipts 1 197.00 3.153.557.81 Expenditures Consultancy Services, 2 223,382,251.89 125,342,139.30 Goods and works Training and Workshops 3 19,767,527.39 45,556,567.20 Operating Costs 4 40,965,883.14 54,259,534.32 ~· Total Expenditures {284.115.662.42) (225.158.240.82) • Surplus/ (Deficit) 5 ( 284,115,465.42} (222,004,683.01} The accounting policies on Page S and notes on Pages 12-16 form an Integral part of these financial statements. 7 NIGERIA-POLYCHLORINATED BIPHENYL (PCB) MANAGEMENT PROJECT STATEMENT OF FINANCIAL POSITION AS AT 315r DEC., 2015 - 2015 2014 ASSETS (Notes) CURRENT ASSETS Bank Balances 6 51,183,689.08 142,846,037.34 Prepayments 7 12.100.000.00 24.200.000.00 TOTAL CURRENT ASSETS 63,283,689.08 167,046,037.34 NON CURRENT ASSETS 12 11119391750.16 llli939£750.16 .....-· Total Assets 175.223.439.24 278.985.787 .so LIABILITIES & FUNDS/NET ASSETS LIABILITIES Payables 9 15A75A97.25 61,143,598.04 Suspense 8 330,256.47 330,256.47 Funds/Net Assets 10 159,417,685.52 217,511,930.99 Total Liabilities & Net assets 175f223A39.24 278!985, 787 .so Stella Uchenna Mojekwu (Project Coordinator) -----~----------- Sylvanus E. Onoh (Project Accountant) -----------~: ________ _ The accounting policies on Page 5 and notes on Pages 12-16 form an Integral part of these financial statements. 8 NIGERIA-POLYCHLORINATED BIPHENYL (PCB) MANAGEMENT PROJECT 5 STATEMENT OF CHANGES IN NET ASSETS/FUNDS FOR THE PERIOD ENDED ON 31 r DEC .. 2015. Net (Notes) Funds Surplus/Deficit Assets/Funds !I !I As at 1st January, 550,819,892.87 (333,307 ,961.88) 217,511,930.99 2015 Contribution for 226,021,219.95 226,021,219 .95 the year .... Surplus/( Deficit) (284,115A65.42) (284,11SA69.42) For the year As at 31st December, 776.841.112.82 {617 .423.427 .30) 159.417.685.52 2015 As at 31st December, 2014 (550.819.892.87) (333.307 .961.88) 217,511.930.99 The accounting policies on Page 5 and notes on Pages 12-16 form an Integral part of these financial statements. 9 NIGERIA-POLYCHLORINATED BIPHENYL (PCB) MANAGEMENT PROJECT STATEMENT OF CASH FLOW FOR THE PERIOD ENDED ON 315T DEC., 2015. -- 2015 2014 OPERATING ACTIVITIES Surplus/ (Deficit) for the Period (284,115,465.42) (222,004,683.31) Non-Operating Activities items -Interest received (197.00) (326,953.35) Changes in current assets/liabilities (lncrease)/decrease in prepayment 12,100,000.00 (16,200,000.00) Increase/ (decrease) in payables (45,668,100.79)' 59,643,598.04 ,.,. Increase/ (decrease in suspense (2,696,604.46) fl Net cash flow from Operating Activities (317,683,763.21) (181,584,643.08) INVESTING ACTIVITIES Acquisition of Assets (69,351,495 .16) Interest Received 197.00 326,953.35 Net cash flow from investing activities 197.00 (69,024,541.81} FINANCING ACTIVITIES IDA Credit 27,112,767.62 GEF Grant 198,908,452.33 155,063,322.61 FGN Counterpart Fund Net cash flow from Financing Activities 226,021,219.95 155,063,322.61 Net cash flow for the year (91,662,342.26) (95,545,862.28) Cash & cash equivalents at the beginning of the Year 142,846,037.34 238,391,899.62 Cash & cash equivalents at the end of the year 51.183.691.08 142.846.037.34 The accounting policies on Page 5 and notes on Pages 12-16 form an Integral part of these financial statements. 10 - Reconciliation of cash and cash equivalents at the end of the year 2015 2014 ~ ~ Bank Balances Draw down account 11,836,222.30 6,975,512.98 Counterpart account 348,515.19 84,231,190.53 Special Account 38,998,953.59 51,639,333.83 Cash and Bank Balances at the end of the year 51.183.691.08 83.202.439.29 • The accounting policies on Page 5 and notes on Pages 12-16 form an Integral part of these financial statements. 11 NIGERIA-POLYCHLORINATED BIPHENYL (PCB) MANAGEMENT PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 3isr -DEC .• 2015. 2015 2014 1. Revenue • Sales of Tender Documents 130,000.00 • Interest Income 197.00 326,953.35 • Miscellaneous Receipts 2,696,604.46 197.00 3.153.557 .81 2. Consultancy Service Development of Requisite Docs 630,000.00 Identification of laboratories 879,916.00 Monitoring & Evaluation Manual 2,940,069.00 20,928,769 .00 National Baseline Inventory for PCBs 104,973,804.00 81,691,586.00 • National PCB Mgt. Plan- Consultancy 108,912,167.89 14,290,844.50 National PCB Mgt Plan- Goods 4,036,'f11.00 National PCB Mgt Plan- Works 2,520,000.00 Identification Interim Storage 6,921,023.80 223.382.251.89 125.342.139.30 The accounting policies on Page 5 and notes on Pages 12-16 form an Integral part of these financial statements. 12 NIGERIA-POLYCHLORINATED BIPHENYL (PCB) MANAGEMENT PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 31ST DEC .. 2015. - 3. Training & Workshop Project Launch/Inception Workshop National & lnt'l Training/Workshop 19,767,527.39 45,556,567 .20 19.767.527.39 45.556 .567.20 4. Operating Costs Stationeries/Office Supplies 4~4,8_87 .so 1,671,494.50 PMU Incentive 5,700,000.00 12,150,000.00 lnterministerial Steering Committee 6,378,501.60 Support Staff Salary 4,461,449.28 3,785,967.34 -..;• Procurement of Expenses . Rent of Office Accommodation Office Furniture &Fittings 12,100,000.00 12,500.00 8,000,000.00 Equipment Maintenance 576,499.00 419,762 .38 Insurance, Fuel &Tracking ( 220,500.00) 1,913,425 .00 Supervision Travel cost 5,229,796.00 15,961,424.00 Maintenance of Office Accommodation 56,500.00 24,400.00 Utilities (Electricity & Water) 100,000.00 243,500.00 Fuel & Lubricant s 435,300.00 Cleaning & Sanitation 34,000.00 Audit Fee 295,420.36 838,564.35 Bank Charges 879,281.90 2,096,478.7 5 Advertisement & Publicity 3,024,000.00 2,772,000.00 Security Services 123,750.00 Courier and Postages 3{)0,000.00 356,000.00 Internet Connectivity 622,500.00 3,115,316.00 Service of Meetings 500,247.50 149,432.00 Maintenance of Motor Vehicle ': 25,500.00 284,000.00 Office Expenses 250,000.00 Impress Expenses 100,000.00 Local Transportation 40!965,883.14 54,259,534.3 2 13 NIGERIA-POLYCHLORINATED BIPHENYL (PCB) MANAGEMENT PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 31ST DEC., 2015. - 2015 2014 ~ N 5. Surplus/ Deficit Net balance in SOP transferred (284,115,465.42) (222,004,683.31) 6. Bank Balances: Naira Accounts Draw Down Account 11,836,222.30 6,975,512.98 Counterpart Account 348,515.19 84,231,190.53 12,184,737.49 91,206,703.51 .. Special Account 7. Prepayments 38,998,951.59 51,183,689.08 51,639,333.83 142,846,037.34 Prepaid Rent ( 2016) 12,100,000.00 24,200,000.00 8. Suspense Irrecoverable difference in the Statement 330,256.47 330,256.47 of Sources and uses of funds 9. Payables Asset Acquisition 59,643,598.08 Payment Due to Consultants 3,529,756.00 Audit Fee brought forward 1,500,000.00 1,500,000.00 5,029 '756.00 61,143,598.04 The Payables due to Consultants are brought into the book but not yet debited by the ban k as at 31st December, 2015. 10. Funds/Net Assets Changes in Funds/Net Assets 159.417,681.52 217.511,930.99 11. Funds Counterpart Contribution by IDA 27,112,767.62 Counterpart Contribution by GEF 198,908,452.33 155,063,322.61 Counterpart Contribution by FGN 226,021,219.95 155,063,322.61 The accounting policies on Page 5 and notes on Pages 12-16 form an Integral part of these financial statements. 14 _ NIGERIA-POLYCHLORINATED BIPHENYLS (PCB) M ANAGEMENT PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 31ST DEC .• 2015. 12. Non-Current Assets Schedule Land Motor Vehicles Office Equipment & Generator & Furniture Total COST As at 1st Jan. 2015 62,354,000.00 32,438,805.00 16,120,945.16 111,939,750.16 Additions As at 31st Dec. 2015 62.354.000.00 32.438.805.00 16.120.945.16 111.939.750.16 ..,.,. DEPRECIATION • As at 1st Jan. 2015 ~ For the Year As at 31st Dec. 2015 NET BOOK VALUE 62.354.000.00 32.438.805.00 16.120.945.16 111,939.750.16 As at 31st Dec. 2015 As at 31st Dec. 2014 62.354.000.00 32,438.805.00 15.824,647 .so 111,939.750.16 The accounting policies on Page 5 and notes on Pages 12-16 form an Integral part of these financial statements. 15 • NIGERIA-POLYCHLORINATED BIPHENYLS (PCB) MANAGEMENT PROJECT 5 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 31 r DEC., 2015. 2015 2014 13. Bank Charges Draw Down Account 25,172.25 635,841.41 Counterpart Account 4,363.25 13,571.25 Special Account 266,117.11 ~189,151.69 295.652.61 838,5!24.35 .... • 14. Events after reporting period There was no event occurring after the reporting period date that warrants any adjustments on the financial statements. 16