Barrett & Partners Chartered Accountants & Business Advisers AUDIT OF THE FINANCIAL STATEMENTS FOR THE INCREASING RESILIENCE TO CLIMATE CHANGE NATURAL HAZARDS PROJECT (GRANT Nos TF095486, TF013810, TF013694 AND TF013869) for the year ended 31s December 2019 PO Box 240 1St Floor, B&P House Lini Highway Port Vila, Vanuatu Tel: (+678) 22280 Fax: (+678) 22317 Email: service@bap.com.vu Web: www.bap-international.com In Confidence Page 1 CONTENTS EXECUTIVE SUMMARY.................................................................. 3-4 BACKG RO U ND............................................,............................. . .. 5 A UD IT O BJECTIVE........................................................................5 SCO PE O F SERVICES............................................................................6 GEN ERA L M ATTERS..........................................................................7 A UD IT O PIN-O N .............................................................................8 -9 APPENDIX 1 - FINANCIAL STATEMENTS & NOTES .................................... 10 APPENDIX 2 - MANAGEMENT REPORT.................................................11 APPENDIX 3 - FOLLOW UP PRIOR YEAR AUDIT POINTS.............................. 12 In Confidence Page 2 EXECUTIVE SUMMARY Barrett and Partners has been engaged by the Office of the Auditor General to carry out an audit of the Increasing Resilience to Climate Change and Natural Hazards project, funded by the World Bank for the Government of Vanuatu. These funds are administered by the Vanuatu Meteorological and Geo-Hazard Department. The following financing agreements were approved; * Global Environment Facility (GEF)Grant agreement for USD5,580,ooo on 14th December 2012 ending December 2018 * Global Facility for Disaster Reduction and Recovery (GFDRR) Grant agreement for USD2,730,000 on 12th December 2012 ending March 2016 (amended extension date 311 December 2017) * European Union (EU) Grant agreement for EUR923,257 on l2th July 2013 ending May 2014 (amended to April 2016). A grant agreement amendment dated28th January made available addition funds of EUR0973,750 making a total grant of EUR1,897,o07. The objective of the project is to increase the resilience of communities in Vanuatu to the impacts of climate variability and change and natural hazards on food and water security as well as livelihoods. The period audited is the year ended 31st December 2019. The grant income and expenditure for the audit period is described below: Controlled by entity External Third Party Total VVUV VUV RECEIPTS GEF (TFol3810) 47,966,144 17,341,364 65,307,508 GFDRR (TF 013694) 0 0 0 EU (TF 013869) 0 oL 0 TOTAL RECEIPTS 47,966,144 17,341,364 65,307,508 PAYMENTS GEF 68,784,130 17,341,364 86,125,494 GFDRR 0 0 0 EU 0 0 0 TOTAL PAYMENTS 68,784,130 17,341,364 86,125,494 In Confidence Page 3 The objective of the audit is to enable us to express our opinion on the accuracy, validity, and completeness of the following: i) Statements of Expenditure, i) Designated Account (controlled by entity), iii) Financial statements, and iv) Compliance with the financing agreement and Vanuatu legislation We achieved the audit objectives by using the World Bank Guidelines 1) Annual Reporting and Auditing, 2) Disbursement Manual and 3) Procurement Policies and Procedures. The audit of the receipts and payment expenditure of VUV65,307,508 and VUV86,125,494 respectively which entailed the following: * Samples tested loo% and 46% receipts-and expenditure respectively in relation to accuracy and compliance (including LPOs, imprest, journals and consultancy fees); * Sample tested direct payment advices (external third party) * Reviewed the content, consistency and compliance of financial statements and supporting notes; * Reviewed the balance and procedures for the Designated Account; * Compliance with Finance Agreement and Vanuatu Financial Regulations; * Compliance with International Public Sector Accounting Standards (IPSAS); and * Reported findings with risks, recommendations and responses. Summary Findings During our audit we have not identified anything that will cause or raise any suspicions towards the management of the project. Conclusion Apart from the matters highlighted in our management report there are no material or significant matters which need to be drawn to the attention of the Stakeholders of the Financing Agreements. In Confidence Page 4 BACKGROUND 1. The Government of Vanuatu has received the following grants towards the cost of the "Increasing Resilience to Climate Change and Natural Hazards Project" (IRCCNH) project implemented by the Government of Vanuatu through the Vanuatu Meteorology and Geo- Hazards Department (VMGD) of its Ministry of Climate Change and Natural Disasters: * World Bank grant TF 013810 from the Global Environment Facility (GEF)trust fund signed 14 December 2012 in the amount of USD5,580,ooo ending Dec 2018; * World Bank grant TF 013694 from the Global Facility for Disaster Reduction and Recovery (GFDRR) trust fund signed 12 December 2012 in the amount of USD2,730,ooo ending March 2016 (extended to 31St December 2017); and * World Bank grant TF 013869 from the European Union Global Climate Change Alliance (EU-GCCA-V) trust fund signed 12 July 2013 for the amount of EUR923, 257 ending April 2016. A grant agreement amendment dated 28th January made available addition funds of EURO973,750 making a total grant of EUR1,897,007. The contribution of the Government of Vanuatu to this project totals VUV 29.8M and the Beneficiaries in-kind contribution totals VUV2.2M. 2. The objective of the project is to help increase the resilience of communities in Vanuatu to the impacts of climate variability and change and natural hazards on food and water security as well as livelihoods. 3. The Vanuatu Meteorology and Geo-Hazards Department (VMGD), through its Project Management Unit (PMU) is responsible for overall project management. Project Implementation Agencies include the National Disaster Management Office (NDMO), Rural Water Supplies (RWS), the Department of Agriculture and Rural Development (DARD), the Vanuatu Agricultural Research and Technical Centre located in Santo (VARTC), and the Department of Local Authorities (DLA). 4. VARTC has two Subsidiary Agreements, one for the EU funds signed 13 September 2013 and another for the GEF funds signed 4 February 2013. 5. VARTC has two Project Agreements, one for the EU funds signed 8 May 2013 and another for the GEF funds signed 14 December 2012. 6. The project is currently estimated to be completed by 2019. OBJECTIVE The objective of the audit of the project financial statements is to enable the auditor to express an opinion on the accuracy, validity and completeness of the Statements of Expenditure, designated account and the financial statements and on whether transactions were in accordance with the financing agreement and Vanuatu legislation. The project transaction ledger and contract ledger provide the basis for preparation of the project financial statements and are established to reflect the financial transactions in respect of the project. In Confidence Page 5 SCOPE OF SERVICES In accordance with the terms of reference the audit will be carried out in accordance with International Auditing Standards and will include such tests and controls as the Auditor considers necessary under the circumstances so as to allow anauditopinion to be formed. It is highly desirable that the Auditor be familiar with the Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Projects (June 2003). The Auditor should also be familiar with the Bank's Disbursement Manual and Procurement Policies and Procedures. These documents may be obtained from the Project Team. The Auditor shall submit the audit report no later than six (6) weeks after receiving the financial statements for each period at the end of the Financial Year, to the Project Director (VMGD Director) as the Government of Vanuatu (the Client) designated agent. In carrying out the audit, special attention should be paid to the following: General Matters, Statements of Expenditure, Designated Accounts, as well as the following: Fraud and Corruption: Consider the risks of material misstatements in the financial statements due to fraud as required by ISA 240: The Auditor's Responsibility to Consider Fraud in an Audit of Financial Statements. The auditor is required to identify and assess these risks (of material misstatement of the financial statements) due to fraud, obtain sufficient appropriate audit evidence about the assessed risks; and respond appropriately to identified or suspected fraud; Laws and Regulations: In designing and performing audit procedures, evaluating and reporting the results, consider that noncompliance by the implementing agency with laws and regulations may materially affect the financial statements as required by ISA 250: Consideration of Laws and Regulations in an Audit of Financial Statements; Governance: Communicate audit matters of governance interest arising from the audit of financial statements with those charged with governance of an entity as required by International Standards on Auditing 260: Communication of Audit Matters with those Charged with Governance; and Risks: In order to reduce audit risk to an acceptable low level, determine the overall responses to assessed risks at the financial statement level, and design and perform further audit procedures to respond to assessed risks at the assertion level as required by Internal Standard on Auditing 330: The Auditor's Procedures in Response to Assessed Risks. In Confidence Page 6 GENERAL MATTERS All external funds have been used in accordance with the conditions of the relevant financing agreements, with due attention to economy and efficiency, and only for the purposes for which they were provided. Goods and services financed have been procured in accordance with the relevant Financing Agreement. All necessary supporting documents, records, and accounts have been kept in respect of all project activities including expenditures reported via quarterly Financial Reports. Clear links should exist between the project account records and reports presented to the Bank. The Designated Accounts have been used and maintained in accordance with the provisions of the relevant Financing Agreement. The project financial statements have been prepared in accordance with and consistently applied cash basis per international Public Sector Accounting Standards (IPSAS) and give a true and fair view of the financial situation of the project as at 31 December 2019 and of resources and expenditures for the period ended on that date. In Coiffdence Page 7 Unqualified Audit Opinion on the Increasing Resilience to Climate Change Natural Hazards Project for the year ended 31st December 2019 The Auditor-General is the auditor of all public funds. The Auditor-General has appointed Barrett & Partners as auditors pursuant to Section 24(1) of the Expenditure Review and Audit Act [CAP.241]. The funds received from the World Bank are held in the Government of Vanuatu Development Fund Account and are administered by the Government of Vanuatu's Meteorological and Geo-Hazards Department. It is the responsibility of the Government to ensure funds are managed in accordance with Government financial regulation and in accordance with the finance agreement. Our audit is to provide an opinion on the Annual Project Financial Statements, Statement of Expenditures, Designated Account and Compliance of the Increase Resilience to Climate Change Natural Hazards funded by the World Bank. In forming our opinion, we carried out appropriate tests with regard to materiality in accordance with the audit objectives and in conjunction with Financial Regulations, World Bank requirements and grant agreement to provide opinions in relation to matters in the above paragraph. Audit Opinion in our opinion apart from the matters highlighted in the management report on page 11 we are satisfied that the financial position, results of operations and cash flow of the Annual Project Financial statement for the Increase Resilience to Climate Change Natural Hazards Project for the year ended 31st December 2019 stated on page 10 is in accordance with International Public Sector Accounting Standards: Financial Reporting under Cash basis of Accounting (IPSAS). Furthermore, we are satisfied, a) with the accuracy and propriety of expenditure of the Statement of Cash Receipts and Payments in Appendix 1; b) with the World Bank's procedures and the balance of the Designated Account at period end; and In Confidence Page 8 c) with the compliance in accordance with the Public Finance and Economic Management Act [CAP 244], The Government Tenders Act [CAP 245] and the Vanuatu Financial Regulations. Barrett & Partners MakSt fo Engagement Partner 10tl May 2021 i Conlidence Page 9 Г,.� С г> .-� a.r ьд �е п. Н V ш � О � � И о � д г.� � _ � �t z а Н а z � � z а �, т � � �� ш � F- � �Е о � и и ,� `L и � О � и �9 ш v � й И ш а U � � ш й Уз `+��. w � � � ш � � � z v � Q � а, ш °�' '.,;. � 4 � Z � v и� � а Н �й � � О � и. �,;� и Н � � � ш � и� м 4 � И � а � z а � � � Х_ ❑ Z ш а� а �, о. а � � ,- REPUBLIC OF VANUATU/RtPUBLIQUE DE VANUATU VANUATU METEOROLOGY AND GEO-HAZARDS DEPARTMENT DtPARTEMENT OE LA WTtOROLOGIE ET DES GtORISQUES DF VANUATU Phone: (678) 24686, 22932 VOIP: 5305 Fax: (678) 22310 Email: adrnin@rneteo.gov.vu Website: www.meteo.govvu Address; PMB 90S4, Lini Highway, Port Vila, Vanuatu (Addie5s correspoodence to DIrector) (Toute corr-espondance dO 6tre envoy e OU Oirecteor) FINANCIAL STATEMENTS FOR THE INCREASING RESILIENCE TO CLIMATE CHANGE AND NATURAL HAZARDS (IRCCNH) PROJECT GEF GRANT No. TFO 13 8 10 GFDRR GRANT No. TFO 13 694 EU GCCA-V-B GRANT No. TF013869 GEF PG No. TF095486/94403 (VANUATU) For the Year Ended 31 December 2019 1 REPUBLIC OF VANUATU/RtPUBLIQUE DE VANUATU : VANUATU METEOROLOGY AND GEO-HAZARDS DEPARTMENT DEPARTEMENT DE LA METEOROLOGIE ET DES GtORISQUES DE VANUATU d Phonle: (678) 24686, 22932 VOlP: 5305 Fax: (678) 22310 0 Email: admin@meteo.gov.vu Website: www.meteo.Rov.vu , a4 Address: PMB 9054, Lini Highway, Port Vila, Vanuatu (Address couespondence to Director) (Toute correspondance doit 6tre envoyee au Directeur) Table of Contents Statement of Cash Receipts and Payments 3 Statement of Comparison of Budget and Actual 5 Statement of Accounting Policies and Notes 6 1. Accounting Policies 6 2. Cash Receipts (VUV) 9 3. Cash Payments (VUV) 10 4. Cash Balance 12 5. Employee Entitlements 12 6. Budget 12 7. Commitments 12 8. VARTC 12 9. Imprests 12 10. Property Plant & Equipment 14 11. Related Parties 15 12. Creditors 15 13. Authorization Date 15 REPUBLIC OF VANUATU/RtPUBLIQUE DE VANUATU VANUATU METEOROLOGY AND GEO-HAZARDS DEPARTMENT DfPARTEhM ENT DE LA MtTtOROLOGIE ET DES GtORISQUES DE VANUATU I Emnail: admnin(@meteo.gov.vu Website: www.mreteo.&ov.vu -s Address: PMB 9054, Lini Highway, Port Vila, Vanuatu (Address correspondence to Director) (Toute courespondance doit &tre envoyee au Directew) GOVERNMENT OF VANUATU VANUATU METEOROLOGICAL AND GEO-HAZARDS DEPARTMENT FINANCIAL STATEMENTS FOR THE INCREASING RESILIENCE TO CLIMATE CHANGE & NATURAL HAZARDS PROJECT (GRANT Nos. TF 95486, TF 94403, TF 013810, TF 013694, TF 013869) FOR THE YEAR ENDED 31 DECEMBER 2019 STATEMENT OF CASH RECEIPTS AND PAYMENTS - BY DONOR, CATEGORY AND COMPONENT (VUV) (1) Notes 2019 2018 Cumulative CASH RECEIPTS 1. TFs 95486/94403 (GEF) (Direct Payments) - 12,731,243 2. TF 013810 (GEF) Designated Account 2 47,966,144 79,160,336 321,337,298 Direct Payments 2 17,341,364 103,276,718 261,291,813 Total 65,307,508 182,437,054 582,629,111 3. TF 013694 (GFDRR) Designated Account 2 - 174,602,086 Direct Payments 2 - 115,136,844 Total 289,738,930 4. TF 013869 (EU) Designated Account 2 - 129,881,070 Direct Payments 2 31,869,642 Total 161,750,712 TOTAL CASH RECEIPTS Designated Account 1, 2 47,966,144 79,160,336 625,820,454 Direct Payments 1, 2 17,341,364 103,276,718 421,029,542 Grand Total 65,307,508 182,437,054 1,046,849,996 CASH PAYMENTS BY CATEGORY & COMPONENT As per attached schedule 3 86,125,494 183,694,728 1,046,038,279 CASH RECEIPTS LESS CASH PAYMENTS (20,817,986) (1,257,674) 811,717 IMPRESTS 9 (2,635,180) 934,120 - ADVANCES NET CHANGE IN CASH (18,182,806) (2,191,794) 811,717 AMOUNTS COMMITTED ADD OPENING CASH BALANCE AS AT 1 JANUARY 18,994,523 21,186,317 - CLOSING CASH BALANCE AS AT 31 DECEMBER 4 811,717 18,994,523 811,717 REPUBLIC OF VANUATU/RtPUBLIQUE DE VANUATU VANUATU METEOROLOGY AND GEO-HAZARDS DEPARTMENT DPARTEMENT DE LA MtTEOROLOGIE ET DES GEORISQUES DE VANUATU Phone: (678) 24686, 22932 VOIP: 5305 Fax: (678) 22310 Email: adminEmeteo.gov.vu Website: www.mneteo.Rov.vu Address: PMB 9054, Lini Highway, Port Vila, Vanuatu (Address correspondence to Director) (Toute correspondance doit tre envoyde ou Directeur) GOVERNMENT OF VANUATU VANUATU METEOROLOGICAL AND GEO-HAZARDS DEPARTMENT FINANCIAL STATEMENTS FOR THE INCREASING RESILIENCE TO CLIMATE CHANGE & NATURAL HAZARDS PROJECT (GRANT Nos. TF 95486, TF 94403, TF 013810, TF 013694, TF 013869) FOR THE YEAR ENDED 31 DECEMBER 2019 STATEMENT OF CASH RECEIPTS AND PAYMENTS - BY DONOR, CATEGORY AND COMPONENT (VUV} (2) Notes 2019 2018 Cumulative CASH PAYMENTS 3 1. TFs 95486/94403 (GEF) - - 12,731,243 2, TF 013810 (GEF) Category 1 86,125,494 175,320,063 554,457,811 Component 1.1 (Ledger 18, PMU) 27,081,899 32,508,287 182,555,511 Component 1.2 (Ledger 1E, NDMO) - 675,700 675,700 Component 1.3 (Ledger 1H, GeoH) 464,636 7,840,854 8,305,490 Component 2.1 (Ledger 28, DLA) 4,753,440 2,932,140 13,896,077 Component 2.2 (Ledger 2E, DLA) 50,811,287 129,327,129 197,057,521 Component 3.2 (Ledger 3E, DARD) - 103,889 38,076,174 Component 4.1 (Ledger 4B, DGMWR) 3,014,232 1,932,064 45,543,620 Component 4.2 (Ledger 4E, DGMWR) - 68,347,718 Category 2 - 27,359,583 Component 3.1 (Ledger 38, VARTC) 27,359,583 Total 86,125,494 175,320,063 581,817,394 3. TF 013694 (GFDRR) Category 1 - 8,374,665 289,738,930 Component 1.1 (Ledger 1A, PMU) - 679,565 67,046,501 Component 1.2 (Ledger ID, NDMO) - 80,985,864 Component 1.3 (Ledger 1G, GeoH) - 7,770,850 100,734,948 Component 2.1 (Ledger 2A, DLA) - - 75,750 30,960,516 Component 2.2 (Ledger 2D, DLA) - 10,011,101 Total 8,374,665 289,738,930 4. TF 013869 (EU) Category 1 - 109,141,872 Component 1.1 (Ledger 1C, PMU) - 66,578,899 Component 2.1 (Ledger 2C, DLA) - - 4,646,101 Component 3.2 (Ledger 3F, DARD) - 33,799,129 Component 4.1 (Ledger 4C, DGMWR) - 4,117,743 Component 4.2 (Ledger 4F, DG MWR) - Category 2 - 52,608,840 Component 3.1 (Ledger 3C, VARTC) - 52,608,840 Category 3 Component 2.2 (Ledger 2F, DLA) Total - - 161,750,712 TOTAL CASH PAYMENTS 86,125,494 183,694,728 1,046,038,279 TFs 95486/94403 - - 12,731,243 TFs 013810, 013694 & 013869 Component 1 - Institutional Strengthening for CCA & DRM 27,546,535 49,475,256 506,882,913 Component 2 - Increasing Community Resilience 55,564,727 132,183,519 256,571,316 Component 3 - Promotion of Improved Technologies - 103,889 151,843,726 Component 4 - Rural Water Security 3,014,232 1,932,064 118,009,081 Grand Total 86,125,494 183,694,728 1,046,038,279 -I REPUBLIC OF VANUATU/RtPUBLIQUE DE VANUATU VANUATU METEOROLOGY AND GEO-HAZARDS DEPARTMENT DtPARTEMENT DE LA MtTtOROLOGIE ET DES GEORISQUES DE VANUATU Phone: (678) 24686, 22932 VOIP: 5305 Fax: (678) 22310 Email: admin@meteo.gov.vu Website: www.meteo.gov.vu o Address: PMB 9054, Lini Highway, Port Vila, Vanuatu (Address correspondence to Director) (Toute correspondonce doit 6tre envoyee ou Directeur) GOVERNMENT OF VANUATU VANUATU METEOROLOGICAL AND GEO-HAZARDS DEPARTMENT FINANCIAL STATEMENTS FOR THE INCREASING RESILIENCE TO CLIMATE CHANGE & NATURAL HAZARDS PROJECT (GRANT Nos. TF 95486, TF 94403, TF 013810, TF 013694, TF 013869) FOR THE YEAR ENDED 31 DECEMBER 2019 STATEMENT OF COMPARISON OF BUDGET AND ACTUAL - BY CATEGORY AND COMPONENT (VUV) Notesl 2019 20188 CuFiueat I memltv 3,6 Budget Actual Variance Budget Actual Variance 1. TFs 95486/94403 (GEF) 12,731,243 12,731,243 2. TF 013810 (GEF) Category 1 Component 1.1 (Ledger 11, PMU) 27,081,899 27,081,899 - 32,508,287 32,508,287 182,555,511 182,555,511 Component 1.2 (Ledger iE, NDMO) - - - 675,700 675,700 675,700 675,700 Component 1.3 (Ledger 1H, GeoH) 464,636 464,636 - 7,840,854 7,840,854 8,305,490 8,305,490 Component 2.1 (Ledger 28, VLA) 4,753,440 4,753,440 - 2,932,140 2,932,140 13,896,077 13,896,077 Component 2.2 (Ledger 2E, DLA) 50,811,287 50,811,287 - 129,327,129 129,327,129 197,057,521 197,057,521 Component 3.2 (Ledger 3E, DARO) - - - 103,889 103,889 38,076,174 38,076,174 Component 4.1 (Ledger 4B, CGMWR) 3,014,232 3,014,232 - 1,932,064 1,932,064 45,543,620 45,543,620 Component 4.2 (Ledger 4E, DGMWR) - - - - 68,347,718 68,347,718 Category 2 Component 3.1 (Ledger 38, VARTC) - - - - 27,359,583 27,359,583 Total 86,125,494 86,125,494- 175,320,063 175,320,063 - 581,817,394 581,817,394 3. TF 013694 (GFDRR) Category 1 Component 1.1 (Ledger 1A, PMU) - 679,565 679,565 67,046,501 67,046,501 Component 1.2 (Ledger 10, NDMO) - 80,985,864 80,985,864 Component 1.3 (Ledger 1G, GeoH) - 7,770,850 7,770,850 100,734,948 100,734,948 Component 2.1 (Ledger 2A, DLA) - (75,750) (75,750) 30,960,516 30,960,516 C o m p o ne n t 2 .2 (Led g e r 2 D , D LA ) - - -10 ,0 1 1,10 1 10 ,0 1 1,10 1 Total -8 - 9,374,665 8,374,665 - 289,738,930 289,738,930 4. TF 013869 (EU) Category 1 Component 1.1 (Ledger IC, PMUl - - - - 66,578,899 66,578,899 Component 2.1 (Ledger 2C, DLA) - . . - - 4,646,101 4,646,101 Component 3.2 (Ledger 3F, DARD) - - - 33,799,129 33,799,129 Component 4.1 (Ledger 4C, DGMWR) - . . 4,117,743 4,117,743 Component 4.2 (Ledger 4F, DGMWR) - - Category 2 Component 3.1 (Ledger 3C, VARTC) - - - 52,608,840 52,608,840 Category 3 Component 2.2 (Ledger 2F, DLA) - - Total - 161,750,712 161,750,712 TOTAL BUDGET AND ACTUAL 86,125,494 86,125,494 - 183,694,728 183,694,728 - 1,046,038,279 1,046,038,279 Government of Vanuatu Vanuatu Meteorology and Geo-hazard Department Financial Statements for the Increasing Resilience to Climate Change and Natural Hazards Project (GEF PG No TF 095486/94403), GEF Grant No. TF 013810, GFDRR Grant No. TF013694, EU GCCA-V-B Grant No. TF013869) For the Year Ended 31 December 2019 Statement of Accounting Policies and Notes 1. Accounting Policies Basis of Preparation The financial statements of the project have been prepared in accordance with the requirement of the Public Finance & Economic Management Act (Cap 244) which includes the requirement to comply with generally accepted accounting practice. The financial statements have been prepared in accordance with Cash Basis IPSAS "Financial Reporting under the Cash Basis of Accounting". There have been no changes in accounting policies during the financial year. Reporting Entity These financial statements are prepared specifically for a project that is managed by the Vanuatu Meteorology and Geo-Hazards Department (VMGD). The project was prepared through one grant (GEF TF No.95486/94403) and has been funded through three grants from (i) the Global Environment Facility (GEF TF No.13810; US$ 5,580,000), (ii) the Global Facility for Disaster Reduction and Recovery (GFDRR TF No.13694; US$ 2,730,000) and (iii) the European Union (EU TF No.13869; Euro 923,257) and implemented through the World Bank. An additional EU grant of Euro 973,750 was made available, through a grant agreement amendment dated 28 January 2016 (making a total EU grant of Euro 1,897,007; closure date of April 2016). The VMGD forms part of the Government of Vanuatu (GoV). VMGD provides meteorological, geo-hazards and climate change adaptation services to the people of Vanuatu. The project's ultimate objective is to help increase the resilience of communities in Vanuatu to the impacts of climate variability and change and natural hazards on food and water security as well as livelihoods. To this end, VMGD with the support of the World Bank has successfully secured funding from the three above-mentioned donors to address these needs. Under the Grant Agreements, different Categories of expenditure are provided for as follows: GEF GFDRR EU Components US$ Components us$ Components Euro Category 1 1, 2, 3.2, 4 5,265,000 1, 2 2,730,000 1, 2.1, 3.2, 4 1.198,750 Category 2 3.1 315,000 None 3.1 450,000 Category 3 None None 2.2 248,257 Total 5,580,000 2,730,000 1,897,007 6 Government of Vanuatu Vanuatu Meteorology and Geo-hazard Department Financial Statements for the Increasing Resilience to Climate Change and Natural Hazards Project (GEF PG No TF 095486/94403), GEF Grant No. TF 013810, GFDRR Grant No. TF013694, EU GCCA-V-B Grant No. TF013869) For the Year Ended 31 December 2019 During 2017, the Grant Agreements for GEF and GFDRR were amended and the Category allocations were amended, with effect from the start of the agreements. The allocation of expenditure by Category is managed accordingly through the component/subcomponent structure. The project activities and budget is managed according to the component/subcomponent structure, within the above Category limits. The ledgers established in the GoV's Smart Stream system are organised according to the subcomponents under the four main components described below. Each subcomponent under each grant relates to activities implemented through the specific agencies, as follows: PMU - Project Management Unit (under VMGD): Component 1.1 DARD - Department of Agriculture and Rural Development: Component 3.2 DGMWR - Department of Geology, Mines and Water Resources: Component 4.1 and 4.2 VARTC -Vanuatu Agricultural Research and Technical Centre: Component 3.1 DLA - Department of Local Authorities: Component 2.1 and 2.2 NDMO - National Disaster Management Office: Component 1.2 GeoH - Geo Hazards Department: Component 1.3 The grant agreements identified the budget activities according to the following four components to be implemented under the project: 1 Institutional strengthening for climate change adaptation and disaster risk management This includes activities to strengthen the PMU, the NDMO and the early warning systems. 2 Increasing community resilience on active volcanic islands and in coastal areas This includes activities to increase the ability of stakeholders at national, regional and community levels to work together to enhance disaster and climate resilience in rural communities. 3 Promotion of improved technologies of food crop production and resilience to climate change This includes activities to support the Project implementing agency (VARTC), and Vanuatu in general, to develop approaches, strategies and technologies for adapting to climate change and responding to food security and market demands. 4 Rural water security: increase access to secure water supply This includes activities to support Vanuatu to increase access to secure water supply. The project's accounting operates within the GoV's Smart Stream system, with additional data capture and reporting functions to accommodate the project's requirements such that payments are allocated against the respective Category and Component, and reported accordingly. 7 Government of Vanuatu Vanuatu Meteorology and Geo-hazard Department Financial Statements for the Increasing Resilience to Climate Change and Natural Hazards Project (GEF PG No TF 095486/94403), GEF Grant No. TF 013810, GFDRR Grant No. TF013694, EU GCCA-V-B Grant No. TF013869) For the Year Ended 31 December 2019 During 2015, following a review of the structure and organization of the project, certain operational costs were consolidated under Component 1.1. The GFDRR funding was closed on 31 December 2017, and all final GFDRR reporting to WB was completed by 30 April 2018. The EU funding was closed on 30 April 2016, and all final EU reporting to WB was completed by 31 August 2016. As part of the closure of the EU funding, certain expenses previously allocated to GEF/GFDRR (including for prior years) were reallocated to EU. The closure date of the project is 30 June 2019, being the closing date for the GEF grant (having been extended by six months from 31 December 2018); a further six months is allocated for settling expenditures incurred by 30 June 2019. These financial statements represent the final financial reporting for the project to 31 December 2019. Accounting Period IPSAS cash accounting standards require that general purpose financial statements be prepared at least annually (IPSAS cash para 1.4.1). These financial statements cover the fiscal year 2019. As all grants are closed, there are no further funds to be drawn down. Currency Reporting Currency The reporting currency is Vanuatu Vatu (VUV). Foreign Currency In-country payments made in foreign currencies and reported in these financial statements have been converted to VUV by the National Bank of Vanuatu at the applicable rate as of the date of transaction. Direct Payments made in foreign currencies and reported in these financial statements have been converted to VUV based on the exchange rate as per www.xe.corn as of the transaction value date. The in-country fund receipts transferred from the World Bank were all in VUV. The three grants mentioned above are denominated in US$ (GEF and GFDRR) and Euro (EU). Withdrawals are charged against the grants, in the respective grant currency, based on exchange rates applied by the World Bank. Cash and Cash Equivalents Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value. Direct Payments made by World Bank VMGD also benefits from payments made directly by the World Bank. These payments do not constitute in-country cash receipts and payments of VMGD, but do benefit VMGD. They are disclosed as Direct Payments in the Statement of Cash Receipts and Payments, and in these Notes. 8 Government of Vanuatu Vanuatu Meteorology and Geo-hazard Department Financial Statements for the Increasing Resilience to Climate Change and Natural Hazards Project (GEF PG No TF 095486/94403), GEF Grant No. TF 013810, GFDRR Grant No. TF013694, EU GCCA-V-B Grant No. TF013869) For the Year Ended 31 December 2019 2. Cash Receipts (VUV) Details of the cash receipts for 2019, for the GEF grant, are given in the following table: SUMMARY OF CASH RECEIPTS FOR 2019 (TF 013810, GEF) WB Value Date VUV 1. Designated Account Component 1.1 (Ledger 1B, PMU) 10,036,902 14/05/19 1,000,000 23/05/19 6,000,000 25/06/19 5,500,000 Transfer to Ledger 2E (30/09/19) (6,463,098) 18/11/19 4,000,000 Component 1.3 (Ledger 1H, GeoH) . Component 2.1 (Ledger 2B, DLA) 7,233,283 23/05/19 2,000,000 25/06/19 1,233,283 18/11/19 2,000,000 Transfer from Ledger 4B(30/11/19) 2,000,000 Component 2.2 (Ledger 2E, DLA) 21,734,449 14/05/19 1,260,357 23/05/19 6,010,994 25/06/19 4,000,000 Transfer from Ledger 18 (30/09/19) 6,463,098 18/11/19 4,000,000 Component 4.1 (Ledger 4B, DGMWR) 2,480,302 23/05/19 1,000,000 25/06/19 500,000 18/11/19 2,980,302 Transfer to Ledger 2B (30/11/19) (2,000,000) Unallocated as at 31/12/19 6,481,208 Total Designated Account 47,966,144 2. Direct Payments MA BUILDERS COMPANY 11/01/19 4,055,040 MA BUILDERS COMPANY 15/07/19 7,825,060 MA BUILDERS COMPANY 18/11/19 3,244,032 ISRAAID VANUATU 31/12/19 2,217,232 Total Direct Payments 17,341,364 The Designated Account (DA) is the local, entity-managed, account; funds are transferred from World Bank periodically, from which payments are made. Direct Payments are made by World Bank directly to the supplier/consultant, based on the official request of the authorized signatories of the project. VMGD receives the funds, which are managed by the VMGD/PMU, through the centralized Smart Stream system. Under this arrangement VMGD has control of the funds and carries out the implementation of the project. PMU makes payments on their behalf after appropriate authorization and documentation provided by VMGD. 9 Government of Vanuatu Vanuatu Meteorology and Geo-hazard Department Financial Statements for the Increasing Resilience to Climate Change and Natural Hazards Project (GEF PG No TF 095486/94403), GEF Grant No. TF 013810, GFDRR Grant No. TF013694, EU GCCA-V-B Grant No. TF013869) For the Year Ended 31 December 2019 Variance with Data in Smart Stream The Cash Receipts for 2019 in VUV in these financial statements is reconciled with the data in Smart Stream as follows: Per Smart Stream (Revenue) 184,826,717 (As per Vision report) Per Financial Statements 651307,508 Variance 119,519,209 This variance relates to the following: Direct Payments from prior years, posted in Smart Stream in 2019 126,000,417 Final cash receipt, posted in Smart Stream in January 2020 (6,481,208) 119,519,209 3. Cash Payments (VUV) The summary of payments is given in the Statement of Cash Receipts and Payments, and is further detailed - by donor/subcomponent/category and by direct payment/designated account - in the table on page 11. During 2016, certain expenses from 2015 and 2016 that had previously been booked against GEF/GFDRR, were transferred to EU prior to the closure of the EU grant. These adjustments are reflected in the project books in 2016 and are reflected in these financial statements in the cumulative figures. Expenditures made in 2016 for micro-projects, and originally charged against Component 2.1, were adjusted in 2017 to Component 2.2 (VUV 5.582 million). Variance with Data in Smart Stream The Cash Payments for 2019 in VUV in these financial statements is reconciled with the data in Smart Stream as follows: Per Smart Stream (Expenses) 193,216,420 (As per Vision report) Per Financial Statements 86,125,494 Variance 107,090,926 The variance relates to transactions posted in Smart Stream in different years, as follows: Accruals 2018 (deducted in Smart Stream in Jan 2019) (3,623,841) Accruals 2019 (added in Smart Stream in Dec 2019) 192,592 Direct Payments from prior years, posted into Smart Stream in 2019 126,000,417 Imprest Retirements included in Smart Stream in different years (1,612,400) 2018 FCPF expenses paid by IRCCNH (corrected in Smart Stream in 2019) (11,945,842) 2017 FCPF imprest paid by IRCCNH (corrected in Smart Stream in 2019) (1,920,000) Total 107,090,92 10 4 F:.:..3 � � . � р �i W � � W � r. с+� о � � м v л о о п н v са оо м о л v � Cr т н с� в, п гч п rv н гю т о со v � о � й о гQ1ч т ' ° °5 �р гv м и п st о и н w п и о� и оо rn и л м р� н л л `t п оо г� рр �i ��л �п й со " ш гчу r гл сд й й v �о н а од ш ai r� ©о оо д, � мh м и п о и и п v v м М а аз м w н и � v т н r� т И О М и и т ор О О и т т л.. 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Cash Balance The closing cash balance in these financial statements is reconciled with the balances in the GOV Smart Stream ledgers as at 31 December 2019. The closing cash balance is summarized in the table on page 13, and this shows the closing adjustments that need to be made in Smart Stream. The closing cash balance represents unspent DA funds, and is to be refunded to World Bank by GoV. 5. Employee Entitlements No provision is required for employee entitlements, as the project has no employees with entitlements under the Employment Act. 6. Budget The approved budget is developed on the same accounting basis (cash basis), same classification basis, and for the same period during which withdrawals from the grant accounts were made (Year Ended 31 December 2019) as for the financial statements. It encompasses the same entities as the financial statements. The 2019 budget and the lifetime budget in VUV as per these financial statements is taken up as per the actual expenditure figures. 7. Commitments There are no outstanding (unpaid) contract commitments as at 31 December 2019 (2018 - VUV 43,171,712) as follows: 2019 2018 Component 1 0 5,422,872 Component 2 0 37,748,840 Component 3 0 0 Component 4 0 0 LTotal L 0 J 43,171,712 8. VARTC VARTC has a subsidiary agreement with the Government of Vanuatu and had operated its own bank accounts until early 2017, when these were closed. 9. Imprests Two imprests that were paid under the project, but never retired, have not been claimed under the project, and these are to be refunded to World Bank by GoV. Aside from those two imprests, as at 31 December 2019, there were no unretired imprests under the project, as per the summary and the detailed table on page 14, 12 Government of Vanuatu Vanuatu Meteorology and Geo-hazard Department Financial Statements for the Increasing Resilience to Climate Change and Natural Hazards C Project (GEF PG No TF 095486/94403), GEF Grant No. TF 013810, GFDRR Grant No. TF013694, EU GCCA-V-B Grant No. TF013869) For the Year Ended 31 December 2019 CLOSING CASH BALANCE AS AT 31 DECEMBER 2019 (VUV) 2019 2018 AS PER ADJUSTMENTS AS PER FINANCIAL AS PER FINANCIAL SMARTSTREAM REQUIRED (1) J_STATEMENTS STATEMENTS 1. TFs 95486/94403 (GEF) 2. TF 013810 (GEF) Component 1.1 (Ledger lB, PMU) 5,485,633 (4,673,916) 811,717 21,859,269 Component 1.2 (Ledger 1E, NDMO) (675,700) 675,700 - (622,050) Component 1.3 (Ledger 1H, GeoH) (805,490) 805,490 - (440,854) Component 2.1 (Ledger 2B, DLA) 9,841,784 (9,841,784) - 748,315 Component 2.2 (Ledger 2E, DLA) (301,097) 301,097 - 18,835,510 Component 3.2 (Ledger 3E, DARD) (3,968,462) 3,968,462 - (3,864,573) Component 4.1 (Ledger 4B, DGMWR) 1,061,974 (1,061,974) - 238,883 Component 4.2 (Ledger 4E, DGMWR) (17,831,423) 17,831,423 - (17,831,423) Component 3.1 (Ledger 38, VARTC) 1,456,458 (1,456,458) - 590,026 Unallocated (Imprests) (184,080) 184,080 - (518,580) Total (5,920,403) 6,732,120 811,717 18,994,523 3. TF 013694 (GFDRR) Component 1.1 (Ledger 1A, PMU) 456,922 (456,922) - 884,682 Component 1.2 (Ledger 10, NDMO) 1,181,066 (1,181,066) - 1,181,066 Component 1.3 (Ledger IG, GeoH) (5,933,819) 5,933,819 - - 5,679,619 Component 2,1 (Ledger 2A, DLA) 9,697,217 (9,697,217) - 5,477,748 Component 2.2 (Ledger 2D, DLA) (3,421,574) 3,421,574 - 797,895 Unallocated (Imprests) (84,500) 84,500 - (504,200) Duplicate Receipts -(2,157,572) Total 1,895,312 (1,895,312)- 4. TF 013869 (EU) Component 1.1 (Ledger IC, PMU) - Component 2.1 (Ledger 2C, DLA) - Component 3.2 (Ledger 3F, DARD) - - Component 4.1 (Ledger 4C, DGMWR) - - Component 4.2 (Ledger 4F, DGMWR) - - Component 3.1 (Ledger 3C, VARTC) - - Component 2.2 (Ledger 2F, DLA) Unallocated (Imprests) - - Total - TOTAL CLOSING CASH BALANCE (4,025,091) 4,836,808 811,717 18,994,523 Note 1: Adjustments to be made in Smart Stream, to close out the project, are as follows TF 013810 (GEF) TF 013694 (GFDRR) 2019 accruals in Smart Stream, to be cancelled 17,832 174,760 2017 transactions, posted in Smart Stream in 2018, never claimed 49,000 3,000 Imprests never retired, and not claimed 184,080 84,500 Cash Receipt credited twice in 2015 (2,157,572) Cash Receipt taken up in Smart Stream in January 2020 6,481,208 6,732,120 (1,895,312) The cash balance of VUV 811,717 is shown under one code (18) and represents unspent DA funds to be refunded to World Bank by GoV. Other adjustments are required in Smart Stream to zero out all project codes. 13 Government of Vanuatu Vanuatu Meteorology and Geo-hazard Department Financial Statements for the Increasing Resilience to Climate Change and Natural Hazards Project (GEF PG No TF 095486/94403), GEF Grant No. TF 013810, GFDRR Grant No. TF013694, EU GCCA-V-B Grant No. TF013869) For the Year Ended 31 December 2019 Summary of Imprest Movements 2019 2018 1. Opening cumulative balance 2,635,180 1,701,060 2. Movements During the Year 2(a) New imprests for the year 8,095,700 11,802,665 2(b) Retired imprests for the year (10,450,140) (10,589,410) 2(c) Refunded imprests for the year (12,160) (279,135) 2(d) Imprests not claimed (268,580) - Net movement for the year (2,635,180) 934,120 Closing Cumulative Balance - 2,635,180 IMPRESTS SUMMARY FOR THE YEAR ENDED 31 DECEMBER 2019 Cumulative Net Cumulative Date of Balance Imprests Retired Refund Unclaimed Movement Balance Name Advance 31/12/18 2019 2019 2019 (Note 1) 2019 31/12/19 1. TF 013810 (GEF) RWS - duplicate air fares paid 2013 184,080 184,080 (184,080) - Obed Tabi 19/01/17 84,500 84,500 (84,500) - [akar Tess 11/09/18 360,000 360,000 (360,000) - Florence latu 25/09/18 408,800 408,410 390 (408,800) - HumaoTSele 22/10/18 521,800 521,800 - (521,800) - Gwendoline 16/11/18 208,000 208,000 - (208,000) - Rebecca laken 12/12/18 868,000 868,000 - (868,000) Samuel Lnparus 15/01/19 218,800 218,800 - . Florence lautu 31/01019 1,150,000 1,149,670 330 - - Rebecca laken 14/02/19 436,000 436,000 - - . Florence lautu 22/03/19 564,600 564,600 - Humao T Sele 12/04/19 930,800 930,800 - Florence lautu 21/05/19 723,800 712,420 11,380 - - Athanas Worwor 29/05/19 208,700 208,700 - - Rebecca laken 4/06/19 977,000 977,000 - - . Samuel Lnparus 11/06/19 1,054,000 1,054,000 - - Florence lautu 28/06/19 1,832,000 1,831,940 60 2,635,180 8,095,700 10,450,140 12,160 268,580 (2,635,180) Note 1: Imprests paid, but not retired and therefore not claimed under the project. To be refunded to World Bank by Gov. 10. Property, Plant & Equipment Payments for Property Plant & Equipment (PPE) are charged fully as disbursements under the respective Component, and included in the Statement of Cash Receipts and Payments, at cost; these are recorded in a PPE Register, for the purposes of inventory control. 2019 2018 Cumulative Provincial Disaster Buildings 44,981,715 Vehicles 13,437,000 Tractors & Implements 15,847,844 Office Equipment 4,613,418 IT Equipment 20,866 5,833,915 Furniture & Other Minor Items 1,577,419 Tools 107,620 107,620 TOTAL 20,866 107,620 86,398,931 14 Government of Vanuatu Vanuatu Meteorology and Geo-hazard Department Financial Statements for the Increasing Resilience to Climate Change and Natural Hazards Project (GEF PG No TF 095486/94403), GEF Grant No. TF 013810, GFDRR Grant No. TF013694, EU GCCA-V-B Grant No. TF013869) For the Year Ended 31 December 2019 There is no PPE purchased on hire purchase schemes and no depreciation is charged under the project. Not included above are transmission and other goods and materials provided to Geo-hazard stations, emergency materials provided to district agencies for onward distribution to beneficiaries, and items provided as part of micro-projects. 11.Related Parties There were no related party transactions during the year. The ultimate owner of the project is Vanuatu Government through the VMGD, as set out in the Grant Agreement. 12.Creditors There were no outstanding invoices under the project as at 31 December 2019 (2018 - VUV 3,449,081). Commitments remaining in Smart Stream under the project are to be cancelled by GoV. 13.Authorization Date The financial statements were authorized for issue on 19/04/2021 by Mr. Mike Sam WAIWAI for DoCC and the Director General of the Ministry of Climate Change. Mr Mike Sam WAIWAI Mrs Esline GARAEBITI Director DoCC Director G eral Ministry of Climate Change 19/04/2021 19/04/2021 5OF 44 1;%du chaPgm9" 15