REPUBLIC OF KENYA FFICE OF THE AUDITOR-GENERAL REPORT OF THE AUDITOR-GENERAL ON THE FINANCIAL STATEMENTS OF EAST AFRICA REGIONAL TRANSPORT, TRADE AND DEVELOPMENT FACILITATION PROJECT CREDIT NO.5638 - KE FOR THE YEAR ENDED 30 JUNE 2017 INFORMATION AND COMMUNICATIONS TECHNOLOG TY WORLD 13ANK IBRD / IDA 0 2 JAN 2018 Financial MlanagemntUi Au thority Project Name: EASTERN AFRICA REGIONAL TRANSPORT, TRADE and DEVELOPMENT FACILITATION PROJECT Implementing Entity: The Information and Communication Technology (ICT) Authority PROJECT GRANT/CREDIT NUMBER... IDA Credit No.: 5638-KE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED JUNE 30, 2017 Prepared in accordance with the Cash Basis of Accounting Method under the International Public Sector Accounting Standards (IPSAS) Eastern Africa Regional Transport, Trade and Development Facilitation (EARTTDP) Project P-ports and Financial Statements Jr the financial year ended June 30, 2017 CONTENTS PAGE 1. PROJECT INFORMATION AND OVERALL PERFORMANCE.................................................................i 2. STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES....................................................... vi 3. REPORT OF THE INDEPENDENT AUDITORS ON THE EARTTDP PROJECT................................... vii 4. STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD ENDED 30TH JUNE 2017..........1 5. STATEMENT OF FINANCIAL ASSETS AND LIABILITIES AS AT 30TH JUNE 2017..........................2 6. STATEM ENT OF CASHFLOW S ..................................................................................3 7. STATEMENT OF COMPARATIVE BUDGET AND ACTUAL AMOUNTS.............................................4 8. NOTES TO THE FINANCIAL STATEM ENTS............................................................................................5 9. PROGRESS ON FOLLOW UP OF AUDITOR RECOMMENDATIONS....................................................9 1 Eastern Africa Regional Transport, Trade and Development Facilitation (EARTTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 . PROJECT INFORMATION AND OVERALL PERFORMANCE 1.1 Name and registered office Name: The project's official is: Ag. CEO Robert Mugo Objective: East Africa Regional Transport, Trade and Development Facilitation Project, the Government of Kenya aims at achieving the following development objectives: (i) contribute to extend the geographic reach of broadband networks including enhanced international connectivity for both South Sudan and Kenya, and (ii) Contribute to improved delivery of public services. Project Activities- ICT Component To enhance internet connectivity through construction of approximately 600 kilometres of high capacity fiber optic cable and associated connections alongside the Eldoret to Nadapal- Nakodok road with provision for fiber spurs and rings to connect schools, hospitals, other strategic locations including pastoralist road side markets, export processing zones, rest stops, community centers and service centers along the Nadapal- Nakodok road. Overall Project The South Sudan - Eastern Africa Regional Transport, Trade and Development Facilitation Program (EARTTDFP) is a regional initiative agreed and jointly financed by the Government of Kenya and the International Development Association for the component to be implemented by the Kenya Government agencies. The proposed program will support Kenya's economic development strategy, and address the mounting pressures to enhance connectivity of the northern parts of the country and South Sudan to the rest of the Country and more so to the Port of Mombasa. This will help to: 1. Support the fisheries development in Lake Turkana, as well as irrigation and animal resources in the north-western of Kenya by providing access to markets in the larger cities in Kenya; 2. Contribute to economic growth in the region through increased trade and better access for landlocked countries to the port of Mombasa; 3. Fully integrate the underdeveloped North-Western parts of Kenya into the larger Kenyan economy and serve the restoration and development of the South Sudan economy by promoting and facilitating regional economic integration between South Sudan and East African neighbouring countries; 4. Provide alternative direct road access to the port of Mombasa for south Sudan's export/imports (without transiting another country), as well as facilitating reconstruction efforts in all sectors in South Sudan; 5. Enhance service delivery and at the same time attract development and road side businesses in the less developed areas of the road corridor within the two economies. i Eastern Africa Regional Transport, Trade and Development Facilitation (EARTTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 Address: The project headquarters offices are Nairobi city, Nairobi County, Kenya. The address of its registered office is: Telposta Towers, 12th Floor Kenyatta Avenue P. o Box 27150-00100 Tel: +254-20-2089061 Nairobi, Kenya Email: communications@ict.go.ke Website: www.icta.go.ke The project also has no offices/branches. Contacts: The following are the project contacts Telephone: (254) 20 2089061 E-mail: communications@ict.go.ke Website: www.icta.go.ke 1.2 Project Information Project Start Date: The project start date is 16 11 2015 Project End Date: The project end date is 21 12 2021 Project Manager: The project manager is Mr Kwame Shiroya Project Sponsor: The project sponsor is World Bank 1.3 Project Overview Line Ministry/State The project is under the supervision of the Information and Communication Department of the Ministry. project Project number 5638-KE Strategic goals of the The strategic goals of the project are as follows: project 1- Contribute to extend the geographic reach of broadband networks including enhanced international connectivity for both South Sudan and Kenya, and 2- Contribute to improved delivery of public services. ii J astern Africa Regional Transport, Trade and Development Facilitation (EARTTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 Achievement of The project management aims to achieve the goals through the following means: strategic goals 1- Construction of approximately 600Km of high capacity fiber optic cable and associated ductwork to be laid alongside the road from Eldoret to Nadapal- Nakodok; 2- Fiber spurs and rings to connect schools, hospitals, other strategic locations including pastoralist road side markets, export processing zones, rest stops, community centers and service centers along the corridor in the project area as part of integrated infrastructure development and smart roads network. Other important The project: background information * This project is being executed under the South Sudan - East Africa Regional of the project Transport, Trade and Development Facilitation (SS-EARTTDF) Program which is aimed at enhancing regional connectivity of South Sudan with its Eastern Africa neighbouring countries and improving access to the Mombasa sea port. Current situation that The project was formed to intervene in the following areas: the project was formed The proposed program will support Kenya's economic development strategy, to intervene and address the mounting pressures to enhance connectivity of the northern parts of the country and South Sudan to the rest of the Country and more so to the Port of Mombasa. Project duration The project started on November 16, 2015 and is expected to run until December 21, 2021. 1.4 Bankers The following are the bankers for the current year: Citibank NA Citibank House Upper Hill Road' P.0 Box 30711-00100 TEL: +254-20-2711221 NAIROBI, KENYA 1.5 Auditors The project is audited by the Office of the Auditor General. 1.6 Roles and Responsibilities List the different people who will be working on the project. This list would include the project manager and all the key stakeholders who will be involved with the project. Also, record their role, their positions, and their contact information. Names Title designation Key qualification Responsibilities iii Eastern Africa Regional Transport, Trade and Development Facilitation (EARTTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 Kwame Shiroya Programme Manager Project Manager Overall project knowledge management Anthony Mugambi Project Manager- Project Manager Government e- technical knowledge applications Zablon Ringera Senior procurement Procurement Project technical Management knowledge advisor for specialist procurement matters Oliver Pyoko Finance Manager Accounting and Finance Manager Finance 1.7 Funding summary The Project is for duration of 6 years from November 16, 2015 to December 21, 2021 with an approved budget of US$ 500M for the overall project the ICT Component is USD $ 29.5M equivalent to Kenya Shillings 2,979,795,000.00 (exchange rate of USD $ 1- Kenya Shillings 101.01) as highlighted in the table below: Below is the funding summary: (i)Grant Name of donor 29,500,000 2,979,795,000 758,300 76,595,883 28,741,700 2,903,199,117 World Bank (ii) Loan Name of - - - - development partner- International Development Association Insert name of development partner (iii) Counterpart funds Government of Kenya Total 29,500,000 2,979,795,000 758,300 76,595,883 28,741,700 2,903,199,117 iv Eastern Africa Regional Transport, Trade and Development Facilitation (EAR TTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 1.8 Summary of Overall Project Performance: - Budget performance against actual amounts for current year and for cumulative to-date, - Physical progress based on outputs, outcomes and impacts since project commencement, - Comment on value-for-money achievements, - List the implementation challenges and recommended way forward. 1.9 Summary of Project Compliance: - Include significant cases of non-compliance with applicable laws and regulations, and essential external financing agreements/covenants, - Include consequences suffered on account of non-compliance or likely to be suffered - Indicate mitigation measures taken or planned to be taken to alleviate the adverse effects of actual or potential consequences of non-compliance v 1astern Africa Regional Transport, Trade and Development Facilitation (EARTTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES The Chief Executive Officer and the Finance Manager for the ICT Authority for EARTTDPproject are responsible for the preparation and presentation of the Project's financial statements, which give a true and fair view of the state of affairs of the Project for and as at the end of the financial year 2017 ended on June 30, 2017. This responsibility includes: (i) maintaining adequate financial management arrangement and ensuring that these continue to be effective throughout the reporting period; (ii) maintaining proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Project; (iii) designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of the financial statement, and ensuring that they are free from material misstatements, whether due to error or fraud; (iv) safeguarding the assets of the Project; (v) selecting and applying appropriate accounting policies; and (vi) making accounting estimates that are reasonable in the circumstances. The Chief Executive Officer and the Finance Manager for the EARTTDP project accept responsibility for the Projects financial statements, which have been prepared on the Cash Basis Method of financial reporting, using appropriate accounting policies in accordance with International Public Sector Accounting Standards. The Chief Executive Officer and the Finance Manager for the EARTTDP project are of the opinion that the Projects Transactions during the financial year ended June 30, 2017, and of the Projects financial position as at that date. The Chief Executive Officer and the Finance Manager for the EARTTDP project confirm the completeness of the accounting records maintained for the Project, which have been relied upon in the preparation of the Project financial statements as well as the adequacy of the systems of internal financial control. The Chief Executive Officer and the Finance Manager for the EARTTDP project confirm that the Project has complied fully with applicable Government Regulations and the terms of external financing covenants, and that project funds received during the financial year under audit were used for eligible purposes for which they were intended and were properly accounted for. Approval of the Project financial statements The Project financial statements were approved by the Chief Executive Officer and the Finance Manager for the ICT Authority and signed by them for EARTTDP project on June 2017 and signed by them. Ag. Chie ExeciV Officer Finance Manager vi REPUBLIC OF KENYA Telephone: +254-20-342330 P.O. Box 30084-00100 Fax: +254-20-311482 E-mail: oag@oagkenya.go.ke NAIROBI Website: www.kenao.go.ke OFFICE OF THE AUDITOR-GENERAL REPORT OF THE AUDITOR-GENERAL ON EAST AFRICA REGIONAL TRANSPORT, TRADE AND DEVELOPMENT FACILITATION PROJECT CREDIT NO.5638 - KE FOR THE YEAR ENDED 30 JUNE 2017 - INFORMATION AND COMMUNICATIONS TECHNOLOGY AUTHORITY REPORT ON THE FINANCIAL STATEMENTS Qualified Opinion I have audited the accompanying financial statements of East Africa Regional Transport, Trade and Development Facilitation Project set out on pages 1 to 10, which comprise the statement of assets and liabilities as at 30 June 2017, and the statement of receipts and payments, statement of cash flows, statement of comparative budget and actual amounts and the special account statement for the year then ended, and a summary of significant accounting policies and other explanatory information in accordance with the provisions of Article 229 of the Constitution of Kenya, Section 35 of the Public Audit Act, 2015 and the Financing Agreements Credits No. 5638-KE dated 20 July 2015 between the International Development Association (IDA) and the Republic of Kenya. I have obtained all the information and explanations which, to the best of my knowledge and belief, were necessary for the purpose of the audit. In my opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements present fairly, in all material respects, the financial position of East Africa Regional Transport, Trade and Development Facilitation project Credit No.5638 - KE as at 30 June 2017, and its financial performance and its of cash flows for the year then ended, in accordance with International Public Sector Accounting Standards (Cash Basis) and comply with the Financing Agreement Credit No.5638 - KE dated 20 July 2015 between International Development Association and the Republic of Kenya. In addition, the special account statement presents fairly, the special account transactions, and the ending balance has been reconciled with the books of account. Further, as required by Article 229(6) of the Constitution, I confirm that public money has been applied lawfully and in an effective way. Basis for Qualified Opinion The audit was conducted in accordance with International Standards of Supreme Audit Institutions (ISSAls). I am independent of East Africa Regional Transport, Trade Report of the Auditor-General on the Financial Statements of East Africa Regional Transport, Trade and Development Facilitation Project Credit No.5638 - KE for the year ended 30 .June 2017 - Information and Communications Technology Authority Promoting Accountability in the Public Sector and Development Facilitation project management in accordance with ISSAI 30 on Code of Ethics. I have fulfilled other ethical responsibilities in accordance with the ISSAI and in accordance with other ethical requirements applicable to performing audits of financial statements in Kenya. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified opinion. Key Audit Matters Key Audit Matters are those matters in my professional judgement, were of more significance in the audit of financial statement for the current year. There were no Key Audit Matters to report in the year under review. Late Submission of the Financial Statement The financial statements for East Africa Regional transport, Trade and Development Facilitation project which were supposed to be submitted to the Office of the Auditor- General on or before 30 September 2017, were received on 18 October 2017. No explanation was given as to why the financial statement was not submitted before the statutory deadline. In the circumstances, the project management was in breach of the Constitution, Section 47(1) of the Public Audit Act of 2015 and the Public Finance Management Act 2012. Management's Responsibility for the Financial Statements The management is responsible for the preparation and fair presentation of these financial statements in accordance with International Public Sector Accounting Standards (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. In preparing the financial statements, management is responsible for assessing the project's ability in continuing to sustain services, disclosing, as applicable, matters related to sustainability of services and using the going concern basis of accounting unless the management either intends to liquidate the project or to cease operations, or have no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Project's financial reporting process. Management is also responsible for the submission of the financial statements to the Auditor-General in accordance with the provisions of Section 47 of the Public Audit Act, 2015. Auditor-General's Responsibilities for the Audit of the Financial Statements The audit objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or Report of the Auditor-General on the Financial Statements qf East Africa Regional Transport, Trade and Development Facilitation Project Credit No.5638 - KE for the year ended 30 June 2017 - Infbrmation and Communications Technolog) Authoritv 2 error, and to issue an auditor's report that includes my opinion in accordance with the provisions of Section 48 of the Public Audit Act, 2015 and submit the audit report in compliance with Article 229(7) of the Constitution of Kenya. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAls will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit conducted in accordance with ISSAls, I exercise professional judgement and maintain professional skepticism throughout the audit. I also: * Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. * Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, and for the purpose of giving an assurance on the effectiveness of the project's internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management. * Conclude on the appropriateness of the management's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the project's ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in the auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my audit report. However, future events or conditions may cause the project to cease to continue as a going concern. * Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. * Obtain sufficient appropriate audit evidence regarding the financial information of the project activities to express an opinion on the financial statements. Report of the Auditor-General on the Financial Statements of East Africa Regional Transport, Trade and Development Facilitation Project Credit No.5638 - KE for the year ended 30 June 2017 - Information and Communications Technology Authority 3 I communicate with the management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that are identified during the audit. I also provide management with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. FCPA Edward R. 0. Ouko, CBS AUDITOR-GENERAL Nairobi 21 December 2017 Report of the Auditor-General on the Financial Statements of East Africa Regional Transport, Trade and Development Facilitation Project Credit No.5638 - KE for the year ended 30 June 2017 - Information and Communications Technology Authority 4 Eastern Africa Regional Transport, Trade and Development Facilitation (EARTTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD ENDED 30TH JUNE 2017 Note 2016/2017 2015/2016 Cumulative Kshs Kshs Kshs RECEIPTS Transfer from Government entities - -- Proceeds from domestic and foreign grants 8.2 76,595,883 - 76,595,883 Loan from external development partners - -- Miscellaneous receipts - Total receipts 76,595,883 - 76,595 PAYMENTS Consultancy 8.3 3,182,700 - 3,182,700 Purchase of goods and services 8.4 2,153,806 - 2,153,806 Acquisition of non-financial assets 8.5 12,141,444 - 12,141,444 Other grants and transfers and payments - -- TOTAL PAYMENTS - 17,477,25 SURPLUS/DEFICIT FOR THE YEAR 59,117,933 - 59,117,933 The accounting policies and explanatory notes to these financial statements are an integral part of the financial statements. Ag. Ch fExecu iv Officer Finance Manager Date Date 1 4astern Africa Regional Transport, Trade and Development Facilitation (EAR TTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 STATEMENT OF FINANCIAL ASSETS AND LIABILITIES AS AT 30TH JUNE 2017 Note 2016/2017 2015/2016 Kshs Kshs FINANCIAL ASSETS Cash and Cash Equivalents Bank Balances 8.6 59,117,933 - Cash Balances Cash Equivalents Imprests and Advances TOTAL FINANCIAL ASSETS 59,117,933 - REPRESENTED BY: Cash and cash equivalents b/fwd. . Surplus/Deficit for the year 59,117,933 - Prior year adjustments . NET FINANCIAL POSITION 59,117,933 - The accounting policies and explanatory notes to these financial statements form an integral part of the financial statements. The financial statements were approved on 2017 and signed by: Ag. Chef Exec e Officer Finance Manager Date Date 2 Eastern Africa Regional Transport, Trade and Development Facilitation (EARTTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 STATEMENT OF CASHFLOW FOR THE PERIOD 30TH JUNE 2017 Receipts for operating income Transfer from Government entities - Proceeds from domestic and foreign grants 76,595,883 Miscellaneous receipts . Payments for operating expenses Consultancy 3,182,700 Purchase of goods and services 2,153,806 Social security benefits . Transfers to other government entities Other grants and transfers . Other payments-Purchase of Motor Vehicles 12,141,444 Net cash flow from operating activities 17,477,950 CASHFLOW FROM INVESTING ACTIVITIES Acquisition of Assets - Net cash flows from Investing Activities CASHFLOW FROM BORROWING ACTIVITIES Proceeds from Foreign Borrowings Net cash flow from financing activities - NET INCREASE IN CASH AND CASH 59,117,933 EQUIVALENT Cash and cash equivalent at BEGINNING of the - year Cash and cash equivalent at END of the year 59,117,933 The accounting policies and explanatory notes to these financial statements form an integral part of the financial statements. The entity financial statements were approved on 2017 and signed by: Ag. Chief E ecutive fcer Finance Manager Date Date 3 Eastern Africa Regional Transport, Trade and Development Facilitation (EARTTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 7. STATEMENT OF COMPARATIVE BUDGET AND ACTUAL AMOUNTS Adj % ust Actual on of Original men Final Comparable Vari Receipts/Payments Item Budget ts Budget Basis Variance ance f-e/ a b c=a+b d e=d-c C % Receipts Transfer from Government entities Proceeds from domestic and foreign grants 971,250,000 - 971,250,000 76,595,883 -894,654,117 92% Proceeds from borrowings Miscellaneous receipts Total Receipts 971,250,000 - 971,250,000 76,595,883 -894,654,117 Payments Consultancy 75,833,333 75,833,333 3,182,700 -72,650,633 -95% Purchase of goods and services 6,666,6667 - 6,666,667 2,153,806 -4,512,861 -68% Social security benefits - - - - Acquisition of non-financial assets - - - 12,141,444 12,141,444 0% Transfers to other government entities - - Other grants and transfers - - Other payments 888,750,000 - 888,750,000 - -888,750,000 100% Total Payments 971,250,000 - 971,250,000 17,477,950 -953,772,050 Note: The significant budget utilisation/performance differences in the last column are explained in Annex 1 to these financial state ents. Ag. Chic Executi e fficer Finance Manager Date Date 4 Eastern Africa Regional Transport, Trade and Development Facilitation (EARTTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 8. NOTES TO THE FINANCIAL STATEMENTS The principal accounting policies adopted in the preparation of these financial statements are set out below: 8.1 Statement of compliance and basis of preparation The financial statements have been prepared in accordance with and comply with International Public Sector Accounting Standards (IPSAS) with particular emphasis on Cash Basis Financial Reporting under the Cash Basis of Accounting. The financial statements comply with and conform to the form of presentation prescribed by the Accounting Standards Board of Kenya. The financial statements are presented in Kenya Shillings, which is the functional and reporting currency of the Project and all values are rounded to the nearest one Shilling. The accounting policies adopted have been consistently applied to all of the years presented. The financial statements have been prepared on the cash basis following the Government's standard chart of accounts. The cash basis of accounting recognises transactions and events only when cash is received or paid out by the Project. i. Recognition of revenue and expenses The Project recognises all revenues from the various sources when the event occurs and the related cash has actually been received by the Project. In addition, the Project recognises all expenses when the event occurs and the related cash has actually been paid out by the Project. ii. In-kind donations In-kind donations are contributions made to the Project in the form of actual goods and/or services rather than in money or cash terms. These donations may include vehicles, equipment or personnel services. Where the financial value of in-kind donations can be reliably determined, the Project includes such value in the statement of receipts and payments both as revenue and as an expense in equal and opposite amounts; otherwise, the donation is not recorded. iii. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and cash at bank, short-term deposits on call and highly liquid investments with an original maturity of three months or less, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value. Bank account balances include amounts held at the Central Bank of Kenya and at various commercial banks at the end of the financial year/period. For the purposes of these financial statements, cash and cash equivalents also include short term cash imprests and advances to authorised public officers and/or institutions which had not been surrendered or accounted for at the end of the financial year/period. 5 Eastern Africa Regional Transport, Trade and Development Facilitation (EARTTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 SIGNIFICANT ACCOUNTING POLICIES (Continued) iv. Pending bills Pending bills consist of unpaid liabilities at the end of the financial year/period arising from contracted goods or services during the year/period or in past years/periods. As pending bills do not involve the payment of cash in the reporting period, they are simply disclosed as an Annex to the financial statements. When the pending bills are finally settled, such payments are included in the statement of receipts and payments in the year in which the payments are made. v. Budget The budget is developed on the same accounting basis (cash basis), the same accounts classification basis, and for the same period as the financial statements. The Project's budget was approved as required by Law and National Treasury Regulations, as well as by the participating development partners, as detailed in the Government of Kenya Budget Printed Estimates for the year. A high-level assessment of the Project's actual performance against the comparable budget for the financial year/period under review has been included in an annex to these financial statements. vi. Exchange rate differences The accounting records are maintained in the functional currency of the primary economic environment in which the Project operates, Kenya Shillings. Transactions in foreign currencies during the year/period are converted into the functional currency using the exchange rates prevailing at the dates of the transactions. Any foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statements of receipts and payments. vii. Comparative figures Where necessary comparative figures for the previous financial year/period have been amended or reconfigured to conform to the required changes in financial statement presentation. viii. Subsequent events There have been no events subsequent to the financial year/period end with a significant impact on the financial statements for the year ended June 30, 2017. 6 Eastern Africa Regional Transport, Trade and Development Facilitation (EAR TTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 NOTES TO THE FINANCIAL STATEMENTS (Continued) 8.2 PROCEEDS FROM DOMESTIC AND FOREIGN GRANTS During the 12 months to 30 June 2017 we received grants from donors as detailed in the table below: Name of Donor Date Amount Grants Grants Grants Total amount in Kshs received received received in received received in donor cash as direct in kind currency payment FY 2016/17 FY 2015/16 Kshs Kshs Kshs Kshs Kshs Grants Received from Bilateral Donors (Foreign Governments) Grants Received from Multilateral Donors (International Organizations) World Bank 7.21.2016 758,300 76,595,883 --76,595,883 Grants Received from Local Individuals and organizations Total - 758,300 76,595,883 76,595,83 *. The direct payment grants represent payments for goods and services done directly by the donor on behalf of the project. Projects should ensure that the adequate documents and support document is requested from the donors to support this grant. 8.3 COMPENSATION OF EMPLOYEES 2016/17 2015/16 Cumulative Kshs Kshs Social benefit schemes outside government - -- Consultancy 3,182,700 -3,182,700 Total 3,182,700 - 3,182,700 7 Eastern Africa Regional Transport, Trade and Development Facilitation (EARTTDP) Project Reports and Financial Statements For the financial year ended June 30, 2017 NOTES TO THE FINANCIAL STATEMENTS (Continued) 8.4 PURCHASE OF GOODS AND SERVICES 2016/17 2015/16 Cumulative Kshs Kshs Kshs Domestic travel and subsistence 191,800 - 191,800 Foreign travel and subsistence 648,004 - 648,004 Training expenses 64,900 - 64,900 Hospitality supplies and services . . Insurance costs . Other operating expenses 1,249,102 - 1,249,102 Routine maintenance - vehicles and other transport equipment - . 2,153,806 - 2,153,806 8.5 ACQUISITION OF NON-FINANCIAL ASSETS 2016/17 2015/16 Cumulative Kshs Kshs Kshs Purchase of vehicles & other transport equipment 12,141,444 - 12,141,444 Purchase of office furniture & general equipment ._ _ 12,141,444 - 12,141,444 8.6 CASH AND CASH EQUIVALENTS C/FWD 2016/17 2015/16 Bank Accounts Kshs Kshs Local Currency Accounts Others Citibank [A/c No 0300085035] 59,117,933 - Total local currency balances 59,117,933 - Total bank account balances 59,117,933 - 8 ° +� �` 4� 0� -� .-�� .-�� � � .ь., Сб Z3 о�У" "о � О N О О v.. �' +� w�. ? � �"' �� у 0� р О О О О о ц' ��� а, й у z Z Z Z � v� F, 0.' � •� i о о о о � 3 ,,,� V � � О 01 'д 'г� 'Г3 'С о � � р � о .� > > > > �� r"' �� о� � ш i ai аиi С/� �'� 0.�' Р� Г�; !у R� '� � � � � �+ '-' � О bi0 � а�"i N s.�, с�б •� и � •" � � � � 3 `� ° �. �. � �, � �, � �, � �, � � а' о с,,ео >� >� >� >� .�•� о о й� � о � о� о� о ,н �� Г� �, е� "et л о о о � � � �.� � а а аа а "� � ° � о �L О й ,� сб � с� о Q) � N � А � � � ° .� .о а� � � -б � �=' а, и а� а� и °� Q � � w � � � W � о � � � � � 3 � сб�"" 3 и с+-'б Q., и � s.�. � z � � а� � и � 'b о � ° � � � � � � � � -��_у., � w � 3 �� � � ��, �, V Q� s.: О v ,�_ � сб � � U bA � А � й � о� � й о. 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С сл пз � = , , г-э � SPECIAL ACCOUNT STATEMENT For period ending 30th JUNE, 2017 Account No. 1000243791 Depository Bank STANCHART LONDON Address 22 BILLTERS ST EC3A213E Related Loan ICTA - A/C'D-'(USD) Credit Agreement Currency USD Part A - Account Activity Beginning balance of 1st July, 2016 as per C. B. K. Ledger Account --------- ------------ 3.315 Add: Total Amount deposited by World Bank --------------------------- 0. Total Interest earnings if deposited in account ----------------------------- Total amount refunded to cover ineligible expenditure ------------------------------ Deduct: Total amount withdrawn 0 --------------------------- Total service charges if not included above in amount withdrawn ----------------------------- Ending balance on 30th June,2017 ---------------------- 3.35. AUTHORISED REPRESENTATIVE SIGNATURE: --------------- ------- ------ CENTRAL BANK OF KENYA DATE ------------------------------ AUTHORISED REPRESENTATIVE EXTERNAL RESOURCES SIGNATURE: ----------------------------- DEPARTMENT-TREASURY DATE 0 t - 1-7 ----------------------------- NOTE:The ending balance as per Central Bank of Kenya Ledger Account and the off-shore Special Account as at 30th June,2017 have been reconciled and a copy of the supporting Reconciliation Statement is attached. EAST AFRICA TRADE AND TRANSPORT FACILITATION PROJECT (ICTA) "TATEMENT OF SPECIAL (DESIGNATED) ACCOUNT RECONCILIATION JR THE YEAR ENDED 30 JUNE 2017 Credit No.: IDA LOAN CREDIT NO.5638-KE Bank Account No.: 1000243791 Held with CENTRAL BANK OF KENYA NOTES AMOUNT AMOUNT USD USD I Amount advanced by IDA 758,333.35 Less: 2 Total amount documented 164,722.00 3 Outstanding amount to be documented 593,611.35 Represented by: 4 Ending Special account Balance as as 30 June 2017 3.35 5 Amounts claimed but not credited as at 30th June 2017 6 Amounts withdrawn and not claimed _ _593,608.00 7 Service Charges (if not included in lines 5 and 6 above) 8 Interest earned (if included in Special Account) 9 Total advance to Special Account Year ended 30 June 2017 593,611.35 Discrepancy between total appearing on line 3 and 9 Notes: I Explain the discrepancy between totals appearing on lines 3 and 9 above (e.g amount due to be refunded to cover ineligible expenditures paid fron the Special/Designated Account) 2 Indicate if amount appearing on line 6 is eligible for financiang by IDA and provide reasons for not claiming the expenditures The amount appearing on line 6 is eligible for financing by World Bank and shall be documented in subsequent IFRs AUTHORISED REPRESENTATIVE RESOURCE MOBILISATION DEPARTMENT DATE: V7 f j . 7 THE NATIONAL TREASURY SPECIAL ACCOUNT STATEMENT For period ending 30th JUNE, 2017 Account No. 1000243791 Depository Bank STANCHART LONDON Address 22 BILLTERS ST EC3A2BE Related Loan ICTA - AC 'D'(USD) Credit Agreement Currency USD Part A - Account Activity Beginning balance of 1st July, 2016 as per C.B.K. Ledger Account 3.35 Add: Total Amount deposited by World Bank 0 Total Interest earnings if deposited in account Total amount refunded to cover ineligible expenditure Deduct: Total amount withdrawn 0 Total service charges if not included above in amount withdrawn Ending balance on 30th June,2017 3.35 AUTHORISED REPRESENTATIVE SIGNATURE: CENTRAL BANK OF KENYA D A T E --------------- AUTHORISED REPRESENTATIVE EXTERNAL RESOURCES SIGNATURE: DEPARTMENT-TREASURY DATE NOTE:The ending balance as per Central Bank of Kenya Ledger Account and the off-shore Special Account as at 30th June,2017 have been reconciled and a copy of the supporting Reconciliation Statement is attached. STATEMENT OF ACCOUNT PAGE NO 1 CENTRAL BANK OF KENYA BANKI KUU YA KENYA ACCOUNT NUMBER : 1000243791 P.77B0 X-1OO-0-O9 NAIROBI ACCOUNT TITLE: ICTA - A/C 'D'(USD) STATEMENT PERIOD:From 01/07/2016 To: 30/06/2017 NO. DATE REFERENCE NO DETAILS DEBIT CREDIT BALANCE OPENING BAL: 3.35 NO. Value Date Refernce.No Details Debit Credit Balance 1 0 0 CLOSING BALANCE: 3.35 END OF ACCOUNT STATEMENT EAST AFRICA TRADE AND TRANSPORT FACILITATION PROJECT (ICTA) STATEMENT OF SPECIAL (DESIGNATED) ACCOUNT RECONCILIATION )R THE YEAR ENDED 30 UNE 20 17 Credit No.: IDA LOAN CREDIT NO.5638-KE Bank Account No.: 1000243791 Held with CENTRAL BANK OF KENYA NOTES AMOUNT AMOUNT USD USD 1 Amount advanced by IDA 758,333.35 Less: 2 Total amount documented 164,722.00 3 Outstanding amount to be documented 593,611.35 Represented by: 4 Ending Special account Balance as as 30 June 2017 3.35 5 Amounts claimed but not credited as at 30th June 2017 6 Amounts withdrawn and not claimed 593,608.00 7 Service Charges (if not included in lines 5 and 6 above) 8 Interest earned (if included in Special Account) 9 Total advance to Special Account Year ended 30 June 2017 593,611.35 Discrepancy between total appearing on line 3 and 9 Notes: I Explain the discrepancy between totals appearing on lines 3 and 9 above (e.g amount due to be refunded to cover ineligible expenditures paid fron the Special/Designated Account) 2 Indicate if amount appearing on line 6 is eligible for financiang by IDA and provide reasons for not claiming the expenditures The amount appearing on line 6 is eligible for financing by World Bank and shall be documented in subsequent IFRs AUTHORISED REPRESENTATIVE RESOURCE MOBILISATION DEPARTMENT DATE: F7 i I THE NATIONAL TREASURY