Government of the Republic of Malawi NATIONAL LOCAL GOVERNMENT FINANCE COMMITTEE (NLGFC) FINANCIAL STATEMENTS FOR THE YEAR ENDED 30T1 APRIL 2019 FOURTH MALAWI SOCIAL ACTION FUND (FIRST ADDITIONAL FINANCING) - STRENGTHENING SAFETY NET SYSTEMS PROJECT- CREDIT 5610 MW AND GRANT D0450 National Audit Office Lilongwe February 2020 NATIONAL LOCAL GOVERNMENT FINANCE COMMITTEE (NLGFC) MASAF 4 -STRENGTHENING SAFETY NET SYSTEMS- FIRST ADDITIONAL FINANCING -CREDIT 5610 MW AND GRANT D0450-MW Table of Contents Page EXECUTIVE DIRECTOR'S REPORT FOR THE YEAR ENDED 30" APRIL 2019.2 STATEMENT OF MANAGEMENT RESPONSIBILITIES FOR THE YEAR ENDED 30TH A PRIL 2019 ............................29 .7 AUDITOR GENERAL'S REPORT........... ........................... 8 STATEMENT OF FINANCIAL POSITION AS AT 30th APRIL 2019............................ 1 STATEMENT OF RECEIPTS AND PAYEMENTS FOR PERIOD ENDED 30T" APRIL 20 19.....................................12 12 -- ...... **--..-- ... -.-1I.. 2--................................... 12 STATEMENT OF DESIGNATED ACCOUNT FOR THE PERIOD ENDED 30" APRIL 2 0 19 ............................... I . . . -13 . . ** . . . . . . --- ............ --.. ................................ 13 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH APRIL 2 0 1 9 .................. .............. .... . ...... ..... I .. . . I ... - ," - -----........................... ....... . . . . I . . . . 14 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)..................................... 15 ANNEX 1: DESIGNATED ACCOUNT MOVEMENT FOR THE PERIOD TO 30 APRIL 2 0 19 .. . . . . . . . . . . . . . . . . . . . . . . . . ........................... ........ * - - -- - - - - - - -- - -- - - -- - -................... ... .. ............. 2 2 ANNEX 11 - FUNDING TO CO UNCILS .............. ........................................................._ 23 l Pa ge NATIONAL LOCAL GOVERNMENT FINANCE COMMITTEE (NLGFC) MASAF 4 -STRENGTHENING SAFETY NET SYSTEMS- FIRST ADDITIONAL FINANCING -CREDIT 5610 MW AND GRANT D0450-MW EXECUTIVE DIRECTOR'S REPORT FOR THE YEAR ENDED 30TH APRIL 2019 1. ESTABLISHMENT OF NATIONAL LOCAL GOVERNMENT FINANCE COMMITTEE (NLGFC) AREAS OF OPERATION Brief Background for National Local Government Finance Committee (NLGCF) National Local Government Finance Committee (NLGFC) was established in 1998 under Section 149 of the Constitution of the Republic of Malawi to facilitate fiscal decentralization and enhance financial management in local councils. The National L.ocal Government Finance Committee has separate vote to which funds approved by Parliament for mobilizing, allocating, disbursing and monitoring management and utilization of financial resources for local development are appropriated. The Committee is specifically designed to facilitate inter-governmental funds transfer particularly for treasury funds. Government of Malawi, through cabinet committee (Cabinet Paper Number C/P/31/2016) directed that National Local Government Finance Committee and Local Development Fund Technical Support Tearn should merge as one institution. The merger is part of the government reform agenda of streamlining public service operating structures with a view of enhancing efficiency and effectiveness in order to save time and cost in service delivery. The New institution became effective on 1st April 2018. The merged institution is currently implementing the Malawi Social Action Fund (MASAF) Programme. MASAF 4 became effective on 14th September 2014 and was scheduled to be implemented for a period of five years from 2014 to December 2019 and was extended to 301h September 2020. The Project Development Objective of MASAF 4 Project is to strengthen Malawi Social Safety net delivery systems and coordination across programs. This objective is going to be achieved through the strengthening of Social Safety Nets System in Malawi, increasing productive assets and reducing the impact of shocks and vulnerability of the poor through improved coverage of targeted beneficiaries. The overarching goal of the project is to reduce vulnerability. The Mission of National Local Government Finance Committee (NLGFC). The mission for NLGFC is to provide technical, financial and economic management services in an efficient and effective manner with the view of ensuring adequate mobilization, equitable distribution and efficient utilization of resources for the delivery of quality demand driven services by Local Governments. 21 P a ge NATIONAL LOCAL GOVERNMENT FINANCE COMMITTEE (NLGFC) MASAF 4 -STRENGTHENING SAFETY NET SYSTEMS- FIRST ADDITIONAL FINANCING -CREDIT 5610 MW AND GRANT D0450-MW EXECUTIVE DIRECTOR'S REPORT FOR THE YEAR ENDED 30" APRIL 2019 (CONT'D) Strategic Objectives * To improve mobilization, allocation and utilization of public resources by Local Governments; * To improve accountability and transparency in the management of public resources by Local Governments. * To enhance regulatory compliance, efficiency and effectiveness in the use of public resources by Local Governments; * To support planning and management of development resources at Local Authority and community levels; * To facilitate the implementation of the Integrated Rural Development Strategy. * To provide resources which ensure that development investments respond to prioritized community development needs; * To protect Financial resources for pro-poor development activities and service delivery at Local Authorities and Community levels; * To finance capacity enhancement of local governance institutions at National, Local Authorities and Community levels; and * To advance Government of Malawi decentralization policy objectives. 2 FUNDING SOURCES During the year to 30th April 2019, the MASAF IV Project received funding amounting to US$ 9.7million from the World Bank through Additional financing -Credit no 5610-MW and Grant D045 and which became effective on 18th August 2015. IDA has provided SDR50.2m (US$70million) to support implementation of Strengthening Safety Net Systems Project- Second Additional Financing. 3 P a g e NATIONAL LOCAL GOVERNMENT FINANCE COMMITTEE (NLGFC) MASAF 4 -STRENGTHENING SAFETY NET SYSTEMS- FIRST ADDITIONAL FINANCING -CREDIT 5610 MW AND GRANT D0450-MW EXECUTIVE DIRECTOR'S REPORT (CONT'D) MASAF IV First Additional Financing Through Credit no 5610-MW and Grant D045 under Additional Financing signed on 18th August 2015, the IDA has provided SDR52.8m (USS75million) to support implementation of Strengthening Safety Net Systems Project. The programme closed on 31st December 2018. The Project Development Objective (PDO) of the project is "to strengthen Malawi's social safety net delivery systems and coordination across programs." The PDO is being achieved through the strengthening of a Social Safety Nets system, which would increase productive assets and reduce the impact of shocks and vulnerability of the poor in Malawvi and improve coverage of targeted benefits. The overarching goal of the PDO is to reduce vulnerability. In the PDO, strengthening delivery systems means providing coverage and support for the poor and vulnerable households for the purpose of improving incomes, resilience, assets and ability to manage risks. This would be assessed in terms of (i) targeting and coverage of benefits, (ii) adequacy of the benefit in terms of ability of households to invest in household level assets and human capital, and (iii) capacity of involved institutions to manage the program efficiently so that the costs of delivery are within established norms for effective safety nets. The Project activities are supported through three Components and these are: (a) Productive Safety Nets, comprising of three subcomponents: Productive Public Works Programme; Livelihoods and Skills Development; and Social Cash Transfer; (b) Systems and Capacity Building; and (c) Project Management. The Financial Statements have been prepared to reflect the activities and position of MASAF IV First Additional Financing, Strengthening Safety Net Systems Project, Credit no 5610-MW and Grant D0450 for the period ended 30t April 2019. In the period, the project has spent MK7. 1 billion (US$9.7million) to implement various programmes as follows: MK'Million USSFMillion Public Works Sub Programme 3,415.0 4.8 Social Cash Transfer 218.5 0.3 Livelihoods and Skills Development 2,436.0 33 Local Authority Capacity Enhancement (LACE) 353.2 0.5 Project Management 7217 0.8 Equipment 9.9 0) Total 7,156.2 9.7 4 1P ag NATIONAL LOCAL GOVERNMENT FINANCE COMMITTEE (NLGFC) MASAF 4 -STRENGTHENING SAFETY NET SYSTEMS- FIRST ADDITIONAL FINANCING -CREDIT 5610 MW AND GRANT D0450-MW 3.0 PROGRAMME ACHIEVEMENTS The MASAF IV Project is intended to improve resilience among the poor and strengthen Social Safety net delivery systems and coordination across programs". Since its effectiveness in 2014, the Project has accomplished the following: * Productive Public Works Programme (PPW): For 2018/19 MK3.4billion (US$4.8nillion) has been disbursed to 35 councils. PPWP work has resulted in creation of various community assets including: roads, afforestation, Land resources management; small scale irrigation and fish ponds, among others. * Social Cash Transfers: Transfer cash to poor and venerable households through the Social Cash Transfer Programme implemented in 11 district councils, namely Kasungu, Nkhotakota, Dedza, Nkhatabay, Ntchisi, Rumphi, Chiradzulu, Karonga, Lilongwe, Blantyre and Dowa. A total of MK21 Smillion (US$0.3 million) has been disbursed as transfers and transfer related costs to the councils. * Livelihood and Skills Development (LiSD): LiSD was designed to finance grants for increasing household level incomes and assets through Community Savings and Investment Promotion (COMSIP) groups from previous groups along the graduation ladder. To date, grants amounting to K581.2 million (USD796, 164) have been disbursed to COMSIP groups for skills development and investment. The groups have achieved cumulated savings totalling MK6.97 billion (USD 9.5 million) against the targeted MK4.2 billion for the component target. Average savings per member was estimated at MK42, 464 (UJSD58.20). Implementation of this component is being facilitated by COMSIP Union. For year 2018/19 MK2.4billion (US$3.3 million) has been spent for targeted beneficiaries. * Local Authority Management Capacity Enhancement(LACE) Unified Beneficiary Registry (UBR) development and management: In 2018/19 the project continued to coordinate development of a platform for targeting the poor and vulnerable into social protection programmes. A cumulative total of 938,782 5 ag a NATIONAL LOCAL GOVERNMENT FINANCE COMMITTEE (NLGFC) MASAF 4 -STRENGTHENING SAFETY NET SYSTEMS- FIRST ADDITIONAL FINANCING -CREDIT 5610 MW AND GRANT D0450-MW households have been registered out of the estimated target of 858,516 in 14 districts representing 109%. These districts include Ntchisi, Rumphi, Chirazulu, Blantyre, Ntcheu, Lilongwe, Dowa, Kasungu, Nkhotakota, Karonga, Chitipa, Likoma, Mchinji and Balaka; MK353million has been spent for Local Authority Management Capacity Enhancement (LACE) activities. Project Management and Equipment: MK724million has been spent for Project Management particularly for salaries for project staff. Monitoring and Evaluation and other operational activities, while MK9.9million was spent on equipment. Alifeyo Banda EXECUTIVE DIRECTOR 6 i P a ge NATIONAL LOCAL GOVERNMENT FINANCE COMMITTEE (NLGFC) MASAF 4 -STRENGTHENING SAFETY NET SYSTEMS- FIRST ADDITIONAL FINANCING -CREDIT 5610 MW AND GRANT D0450-MW STATEMENT OF MANAGEMENT RESPONSIBILITIES FOR THE YEAR ENDED 30TH APRIL 2019 The Executive Director for National Local Government Finance Committee (NLGFC), under the direction of the Secretary to the Treasury as Controlling Officer and Secretary for Local Government and Rural Development as overseer on programmatic matters, is responsible for preparing the Annual Financial Statements of the NLGFC in accordance with the financing agreements for the projects supporting the NLGFC and in line with the Public Finance Management Act. In preparing the Financial Statements, the Executive Director is required to: a) Select proper and suitable accounting policies and apply them consistently; b) Make judgements and estimates that are reasonable and prudent; c) Prepare the financial statements on a going concern basis unless circumstances dictate otherwise, d) Comply with applicable accounting standards when preparing the consolidated financial statements, subject to any material departures being disclosed and explained in the consolidated financial statements The Executive Director and Controlling Officers of all agencies utilising NLGFC funds are responsible for keeping proper accounting records that reflect with reasonable accuracy at any point in time, the financial position of the components of the NLGFC under their implementation. Each Controlling Officer is answerable to the Public Accounts Committee of Parliament. The Secretary to the Treasury, takes overall answerability to the NLGFC Funding partners and Public Accounts Committee. Management of NLGFC is also responsible for maintaining effective systems including designing, implementing and maintaining internal controls relevant for the preparation and fair presentation of these Financial Statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies and relevant accounting estimates that are reasonable in the circumstances. The financial stateme ts have been approved by the National Local Government Finance Committee on..... ......... and are signed on its behalf by: EXECUTIVE DRECTOR DIRECTOR'OFFINANCE 7 |P age Telephone: ' 265 1 770 700 In reply please quoie No Facsimile: +265 1 773 071 +265 1 776 125 NATIONAL AUDIT OFFICE +265 1 774 138 P O. BOX 30045 All Communications should be addressed to LILONOWE 3 National Audit Office MALAWI AUDITOR GENERAL'S REPORT TO THE EXECUTIVE DIRECTOR ON THE FINANCIAL STATEMENTS OF THE LOCAL DEVELOPMENT FUND - FOURTH MALAWI SOCIAL ACTION FUND (ADDITIONAL FINANCING) - STRENGTHENING SAFETY NET SYSTEMS PROJECT- CREDIT 5610 MW AND GRANT D045 FOR THE YEAR ENDED 30"" APRIL, 2019 Opinion I have audited the of Financial Statements of Local Development Fund - Strengthening Safety Net Systems-First Additional Financing -Credit 5610 Mw and Grant D045-Mw, comprising Statement of Financial Position, Statement of Receipts and Payments, Statement of Designated Account and other explanatory notes for the year period ended 301h April, 2019 as set out on pages II to 24. In my opinion, the financial statements, present fairly, in all material respect, the financial position of Local Development Fund - MASAF (Additional Financing) Strengthening Safety Nets Systems Project as at 301 April, 2019, and of its financial performance for the year then ended in accordance with International Public Sector Accounting Standards (IPSAS) and in the manner required by the Donor. Key Audit Matters Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters. I have determined that there is no need to communicate key audit matters in my report due the nature of the audited entity. Responsibilities of Management for the Project's Financial Statements Management of the Local Development Fund is responsible for the preparation and fair presentation of the financial statements in accordance with International Public Sector Accounting Standards (IPSAS) Financial Reporting under the Cash Basis of Accounting, Donor terms of agreement and financial provisions, and for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation of the financial statements that are free from material misstatements, whether due to fraud or error, 8 Page Auditor's Responsibilities for the Audit of the Project's Financial Statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards of Supreme Audit Institutions (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 Project's Financial Statements. As part of an audit in accordance with ISSAls, I exercise professional judgment and maintain professional scepticism 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, but not for the purpose of expressing an opinion on the effectiveness of the internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * 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. I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. I also provide those charged with governance 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. From the matters communicated with those charged with governance, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, 9 Pa ge I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the pU blic interest benefits of such communication. The engagen itor n the audit resulting in this independent Auditor General's report is: Signature:.. .......... THOMAS K.B MAKIWA ACTING AUDITOR GENERAL NATIONAL AUDIT OFFICE LILONGWE MALAWI Date:.10 I1) P a ge NATIONAL LOCAL GOVERNMENT FINANCE COMMITTEE (NLGFC) MASAF 4 -STRENGTHENING SAFETY NET SYSTEMS- FIRST ADDITIONAL FINANCING -CREDIT 5610 MW AND GRANT Dq450-MW STATEMENT OF FINANCIAL POSITION AS AT 30"' APRIL 2019 Notes As at 30 April 2019 As at 30 June 2018 MK US$ MK US 5 Non-Current Assets Social Economic Investment Public Works Programme(PWP) 5 33,367,102,176 45,877,141 29,952,141,912 41,094,098 Social Cash Transfcr(SCT) 5 4,994,525,942 6.875,480 4,775,990,607 6,569,258 Livelihoods and Skills Development(COMSIP) 5 5.637.663.567 7,716,001 3,201,710,228 4,388,831 Total 43,999,291,685 60,468,621 37,929,842,748 52,052,187 Plant and Equipment Motor Vehicles 7 2,180.,998144 3,017,034 2,180,998,144 3,017,034 Computers 7 413,204,242 563,783 413,204.242 563,783 Office Equipment 7 845,993,234 1,156,787 836,090.734 1,143,292 Total Plant and Equipment 3,440,195,619 4.737,604 3,430,293,119 4,724,109 Total Non-Current Assets 47,439,487,304 65,206,226 41,360,135,867 56,776,296 Current Assets Bank and cash Balances 4 2,608,020 3,588 7,154,045,071 9,699,048 Total Current Assets 2,608,020 3,588 7,154,045,071 9,699,048 Total Funds Employed 47,442,095,325 65,209,813 48,514,180,938 66,475,344 Financed by : World Bank (IDA)Grant D045 and Credit 5610-MW 6 53,605,912,335 73,741,149 53,605,912,335 73,741,149 Other Receipts 3 35,740,218 48,885 30,929,912 43,330 Local Authority Capacity - - - . Enhancement (LACE) 5 (2,031,070,052) (2,779,356) (1,677,876,236) (2,297,412) Project Management 5 (4,168,487,176) (5,800866) (3.444785,072) (5,011,724) Total Finances 47,442,095,325 65,209,813 48,514,180,938 66,475344 ................. A. Banda K. Santlie Executive Director Director of Finance 11 Pagec NATIONAL LOCAL GOVERNMENT FINANCE COMMITTEE (NLGFC) MASAF 4 -STRENGTHENING SAFETY NET SYSTEMS- FIRST ADDITIONAL FINANCING -CREDIT 5610 MW AND GRANT D0450-MW STATEMENT OF RECEIPTS AND PAYEMENTS FOR PERIOD ENDED 30r"' APRIL 2019 30th April 2019 30th June 2018 Notes MK US $ MK US5 RECEIPTS IDA Grant 3 - - 13,758,824,656 18,793.589 IDA Credit 3 - - 4,932,860,688 6,737,040 Other Receipts 3 4,810,306 5,555 18,124,969 25,740 Exchange Difference - - - - Cash Withdrawals 4,810,306 5,555 18,709,810,312 25,556,370 Opening Balances 4 7,154,045,073 9,699,049 5,366,844,212 7,275,039 Total Receipts 7,158,855,380 9,704,603 24,076,654,525 32,831,409 Payments Public Works Sub Programme 5 3,414,960,263 4,783,043 10,292,466,716 13,774,536 Social Cash Transfer 5 218,535,335 306,222 2,353,460,042 3,217,034 Livelihoods and Skills Development 5 2,435,953,339 3,327,169 955,503,033 1,304,338 Local Authority Capacity Enhancement (LACE) 5 353,193,816 481,944 827,449,575 1,131,397 Project Management 5 723,702,104 789,141 2,105,916,341 3,175,589 Equipment 7 9,902,500 13495 387,813,743 529,466 Total Payments 7,156,247,357 9,701,015 16,922,609,451 23,132,360 Closing Balance 2,608,023 3588 7,154,045,073 9,699,049 121 Ia P ae NATIONAL LOCAL GOVERNMENT FINANCE COMMITTEE (NLGFC) MASAF 4 -STRENGTHENING SAFETY NET SYSTEMS- FIRST ADDITIONAL FINANCING -CREDIT 5610 MW AND GRANT D0450-MW STATEMENT OF DESIGNATED ACCOUNT FOR THE PERIOD ENDED 30TH APRIL 2019 30th April 2019 30th June 2018 US $ US S Receipts IDA Grant - 18,793,589 Other Receipts-Interest 6,555 25740 Total Cash Received in year 6,555 18,819,329 Expenditure 1. Goods, works, non-consulting services, consultants' services and Operational Costs for Part A .1 of the Project 428,575 10,444,496 2. Goods, consultants' services, Operational Costs and [raining for Parts A .2 and A.3 of the Proiect - 1,158,858 3. COMSIP Grants for Part A.2 (a) of the Project 2,532,781 709,799 4.Cash Transfer installments for Part A,3(a) of the Project 68,411 2,638,124 5. Goods, non-consulting services, consultants' services, Training and Operational Costs for Parts B and C of the Project 1,479,723 3,50,917 Total 4,509,490 18,002,194 Net Cash Movement - 817,135 Local Operating Account 484,220 Advances to Councils - 1,362.049 Opening Balance 1 July 2017 4,.502,990 1,839,586 Total Closing Balance(Designated Account) 5500 4502,990 13 P a e c NATIONAL LOCAL GOVERNMENT FINANCE COMMITTEE (NLGFC) MASAF 4 -STRENGTHENING SAFETY NET SYSTEMS- FIRST ADDITIONAL FINANCING -CREDIT 5610 MW AND GRANT D0450-MW NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH APRIL 2019 1. Nature of Business Through Credit no 5610-MW and Grant no D0450-MW under the First Additional Financing, the IDA provided SDR52.8m (US$75million) to support implementation of Strengthening Safety Net Systems Project. The programme closed on 3 1' December 2018. 2. Accounting Policies 2.1 Basis of preparing the Accounts The financial statements have been prepared on the historical cost convention and on a cash basis in accordance with International Public Sector Accounting Standards (IPSAS), except for capitalisation of assets. All receipts and expenses incurred in the period are reflected in the financial statements. 2.2 Fixed Assets Capital expenditures are capitalized in the year the assets are purchased. There is no provision for depreciation on the fixed assets throughout the Project life. There is no revaluation or impairment of assets. The assets are held at cost. 2.3 Grants to Local Assemblies Disbursements for Productive Public Works Programme, Livelihoods and Skills Development and Social Cash Transfer are done through cycles. Once disbursements to Local Assemblies are made, they are treated as Grants in the financial statements. 2.4 Foreign Currency Translation Foreign currency transactions for the income and expenditure account items and fixed assets are translated using the actual exchange rate at the date of draw down. 14 P a g e NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30APRIL 2019 All local expenditures paid from the local accounts/currency are translated back to US dollar at the actual exchange rate at which draw-down was converted at the date of transfer from Special/Designated account to local account. Where the expenditure cannot be fully met from the proceeds of a draw down, and part of the expenditure has to be met from the proceeds of the subsequent draw down, which may have been effected at a different conversion rate, the translation rate of the total expenditure from the local currency to the US dollar is on First in First out (FIFO) basis. Current assets and special/Designated account balances are translated using the rate at the closing date. (Closing Rate Method). 2.5 Receipts Receipts from Development Partners/Donors are stated at actual amounts drawn from the World Bank by way of replenishment into a Designated/Special Account at Reserve Bank of Malawvi and direct payments. 15 Pag e NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 3.1 - Cash Withdrawals from Grant Account Date 1MK US$ Fotal Cash Withdrawals from Credit Financing Account Current Year - Total Cash Withdrawals from the Financing Accounts Previous Year 48,673,0 5 1 ,6 4 7 67,004,109 3.2 - Cash Withdrawals from Credit Account Date 11K u s$ Total Cash Withdrawals froin Credit Financing Account Current Year tal Cash Withdrawals from the Financing Accounts Previous Year 4,932,860,688 6,737,040 Total Cash Withdrawals from the Financing Accounts 53605,91223 35 73,741,149 Total from IDA 953,605,912,333 7, 3.4 Other Receipts Other Receipts 4,810,306 5,555 Total Other Receipts Current Year 4,810,306 5,555 Total Other Receipts Previous Yer 30,929,12 43,330 Total Withdrawals 53,641,652,552 73,790,035 161 Page) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 4.0 Bank Balances Kwacha US $ Opening Balances as at 1 July 2018 1 RBM Holding Account (Part 1) 18,358,851 26,126 2 MSB Operating Account 321,903,096 458,094 3 Funds Drawn but not yet utilised Commitments 3,450,135.204 4,711,837 4 Designated Account -MASAF IV 3363.647.920 4,502.991 Total opening Balance as at 1 July 2018 7,154,045,071 9,699,048 Closing Balances as at 30 April 2019 I RBM Holding Account (Part 1) 2,437,727 3,353 2 FDH)I Operating Account 129,948 179 3 Funds Drawn but not yet utilised I Commitments - 0 4 Designated Account -MASAF IV 40,346 56 Total closin0 Balance as at 30 April 2019 2,608,020 3,588 17 Pa g c NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 5.0 - Community Livelihoods Support(CLS),Local Capacity Enhancement(LACE) & Project Manaement Kwacha US S Public Works Subprojects Funds include payment of wages, tools and administration costs to all Councils; resources are disbursed with 80% of resources going to wages and 20% on tools and administration Public Works Sub Projects Disbursements to Sub Projects-Public Works Programme(MASAF IV) 3.414,960,263 4,783,043 Disbursements to Sub Projects-Savings and Investment - Total charged to PWSB (Category 1 3,414,960,263 4,783,043 Add from previous years 29,952,141,912 41,094,098 Balance Carried forward 30 Aeril 2019 33,367,102,176 45,877,141 Social Cash Transfer Cash transfers are effected bi -monthly payable to beneficiaries in 11 District Councils. An average transfer rate of MK7,000 per household was applied during the year Disbursements for Social Cash Transfer(MASAF IV) 218,535,335 306,222 Total charged for SCT (Category 1 218,535,335 306,222 Add from previous years 4,775,990,607 6,569,258 Balance Carried forward 30 April 2019 4,994,525,942 6,875,480 Livelihoods and Skills Development Resources are transferred to COMSIIP for the implementation of the livelihoods project. Livelihoods and Skills Development 2,435.953,339 3.327,169 Total charged to CMSP (Category 1) 2,435,953,339 3,327169 Add from previous years 3,201,710,228 4,388.831 18P a ge Balance Carried forward 30 April 2019 5,637,663,567 7,716,001 Local capacity Enhancement (LACE) Resources under LACE relate to Unified Beneficiary Registry Environmental & 353,193,816 481.944 Social Safeguards, development and enrollment of the UBR - - Total charged to LACE (Category 2) 353,193816 481,944 Add from previous years 1,677,876,236 2,297.412 Balance Carried forward 30 April 2019 2,031,070,052 2,779,356 Project Management Payment of Project Staff salaries, operational costs, Monitoring and supervisions and anti-corruption initiatives Project Management(MASAF IV) 723,702,104 789,141 Total charged to Project Management 723,702,104 789,141 Add from previous years 3,444,785,072 5,011,724 Balance Carried forward 30 April 2019 4,168,487,176 5,800,866 Grand Total for Sub Grant Investments 50,198,848,913 69,048,843 19 Page NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 6.0 - Funding by Donors World Bank Drawins Kwacha US S Current Year Grant D045-MW Credit 5610-MW Sub Total Previous Year Previous year Credit 5610-MW 48,673,051,647 67,004.109 Previous year Grant D045-MW 4,932,860,688 6.,737.040 Total Credit & Grant 53,605,912,335 73,741,149 Total Drawings for Twelve months period to 30 April 2019 - Total Drawings (Cumulative) as at 30 April 2019 for Credit 533605912,335 73,741,149 Other Receipts 4,810,306 5,555 Add from Previous years 30,929,912 43,330 Total Other to (late 35,740,218 48,885 20 P a ge NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 7.0 - Fixed Assets MOTOR VEHICLES MK USS Balance B/Forward I July 2018 2,180,998,144 3,017,034 Additions during the year - Disposals during the year - Balance C/Down 30 April 2019 2,180,998,144 3,017,034 COMPUTERS MK USS Balance B/Forward I July 2018 413,204,242 563,783 Additions during the year - - Disposals during the year - - Balance C/Down 30 April 2019 413,204,242 563,783 OFFICE EQUIPMENT MK US S Balance B/Forward 1 July 2018 836,090,734 1,143,292 Additions during the year 9,902,500 13,495 Disposals during the year - - Balance C/Down 30 April 2019 845,993,234 1,156,787 Total Movement for year 9,902,500 13,495 Closing Balance as at 30 April 2019 3,440,195,619 4,737,604 8.0 Cash flow Statement The financial statements as at 30th April 2019 do not inc lude the Statement of Cash flow because the information contained in the Statement of Receipts and Payments is similar to that in the Cash Flow Statement due to the fact that no provisions have been made and does not contain cash equivalents. 21 P ae ANNEX 1: DESIGNATED ACCOUNT MOVEMENT FOR THE PERIOD TO 30 APRIL 2019 Dr C R Description Date US$ US$ Opening Balance 1-Jul-16 4,502,990,69 M7-Interest 2018 Bank Interest - July 2018 - Masaf IV Additional Financing 7/3112018 2,823.13 BC-31JULY2018 Bank charges - Desgnated account for July 2018 - Standard Bank 7/31/2018 564.63 M7- PayInstr DA, CP, MZ Town, Neno, Likoma, Kasungu Town, MH Town, 8/29/2018 471,873.00 Luncheza, KA, KK District Council M7-Payinstr15 DA, NU, SA, LL City, LL MC DZ, District Council 8/29/2018 458,151.00 M7-Paylnstrl4 Zomba, Ntchen,l Mangochi, Machinga, Balaka District Council 8/29/2018 281,162.00 M07-Paylnstrl3 Nsanje, CK, PE, MJ, TO, BT, CZ, ZO District Council 8/29/2018 618,023,97 M7-Payinst-13 Likoma district council 8/29/2018 4,008,04 M7-Interest Aug Bank Interest - August 2018 - Masat IV Additional Financing 8/31/2018 1,397.73 18 BC-31Aug2018 Bank charges - Deagnated account for August 2018 - Standard 8/31/2018 621.87 Bank Payinstr88 Transfer of Operation Funds for Masaf IV 1st Additional Financing 9/7/2018 450-000.00 - $450,000 from DA to Holding a/c M7-PaylnstrB7 Globe Internet 9/12/2018 56,184.13 BC-30092018 Bank charges for Designated accounl for the September 2018- 9/30/2018 104.82 Masaf IV Addilional Financing M-Interest - Bank Interest - October 2018 - Masaf IV Additional Financing 10/31/2018 890.46 OCT 18 BC-310ct2018 Bank charges - Deagnated account for October 2018 - Standard 10/31/2018 138.09 Bank M7-Interest Nov Bank Interest - November 2018 - Masaf IV Additional Financing 11/30/2018 668.35 18 BC-30Nov2018 Bank charges - Desgnated account for November2018- Standard 11/30/2018 133-67 Bank PAYINSTS9 Transfer of Funds from Da to NLGFC Account - US$1,500,00000 O 12131/218 1,500,000.00 - PWP Wages to Councils PAYINST90 Transfer of Funds from Da to NLGFC Account - US$574,687. 00 - 12131/2018 574,687.00 PWP Wages to Councils M7-Interest Dec Bank Interest- December 2018 - Masaf IV Additional Financing 12/31/2018 306.95 18i BC-31Dec2018 Bank charges - Desgnated account for December 2018 - Standard 12/31/2018 252.47 Bank BANKCHARGEO Designated Account 1/31/2019 5.98 BANKINTEREST Bank Interest for January 2019 - Designated Account 1/31/2019 29.81 011 9 BANKCHARGEO Designated Account 2/28/2019 5.39 BANKINTEREST Bank Interest for February 2019 - Designated Account 2/28/2019 26.93 0219 B1KCHARGEO Designated Account 3/29/2019 14.04 BANKINTEREST Bank Interest for March 2019 - Designated Account 3/29/2019 29.82 0310 BANKCHARGES Designated Account 3/31/2019 581-71 0419 BANKCHARGEO Designated Account 3/31/2019 60,00 PAYINSTR91 Zornba district council 3/31/2019 93.500.00 6/30/2018 4,509,545.58 4,509,490,08 Closing Balance 55.50 Closing Rate Exchange Diif Previous year' Net Movement for the current year 22| Pa g e ANNEX II- FUNDING TO COUNCILS PWP FUNDING TO COUNCIL FOR THE FINANCIAL YEAR 2018/19 PNNP FUNDING TO COUNCIL FOR THE FINANCIAL YEAR 2018/19 1st Additional 2nd Additional Total Funding Number Council Financing Financing PWP I Balaka District Council 64,131,239 440,846,010 504,977,249 2 Blantyre District Council 41,737,410 286,908,210 328,645,620 3 Blantyre City Council 51,808,185 356,135,985 407,944,170 4 Chitipa District Council 230,400,814 0.00 230,400,814 5 Chiradzulu District Council 39,813,479 273,681,945 313,495,424 6 Chikwawa District Council 55,887,975 384,180,975 440,068,950 7 Dedza District Council 501,624,144 000 501,624,144 8 Dowa District Council 39,993,443 274,920,525 314,913,968 9 Karonga District Council 55,279,923 355,804,223 411,084.146 10 Kasungu District Council 41,956,200 288,412,200 330,368,400 11 Kasungu Municipal Council 52,434,450 0.00 52,434,450 12 Likona District Council 2,939,895 23,472,495 26,412,390 13 Lilongwe District Council 80,173,600 551,123,865 631,297,465 14 Lilongwe City Council 47,651,110 327,560,175 375,211,285 15 Lucheza Municipal Council 5,012,280 40,018,680 45,030,960 16 Mangochi District Council 65,189,768 448,122,687 513,312,455 17 Machinga District Council 518,151,420 0.00 518,151,420 18 Mangochi Town Council 89,952,450 14,916,450 104,868,900 19 Mchinji District Council 37,068,792 254,815,718 291,884,510 20 Mulanje District Council 56.155.028 386,016,728 442,171,756 21 Mwanza District Council 8,663,760 69,172,560 77,836,320 22 Mzimba (M'mbelwa) District Council 54,642,803 375,621,503 430,264,306 23 Mzuzu City Council 26,104,433 193,017,533 219,121,966 24 Neno District Council 21,480,323 158,826,623 180,306946 25 Nkhatabav District Council 4,000,000 234,392,088 238,392.088 26 Nkhotakota District Council 43,259,288 297,369,788 340,629,076 27 NSanje District Council 48,326,850 332,204,850 380,531,700 28 Ntchisi District Council 15,589,292 202,370,805 217,960,097 29 Ntcheu District Council 41,969,134 288,500,670 330,469,804 30 Phalombe District Council 43,024,410 296,755,210 339,779,620 31 Rumphi District Council 27,057,701 200,066,051 227,123,752 32 Salima District Council 519,139,562 0.00 519,139,562 33 Thyolo District Council 66,875,738 459,712,238 526,587,976 34 Zomba District Council 128,735,827 342,343,295 471,079,122 35 Zomba City Council 26,059,039 192,681,889 218,740,928 Total 3,152,289,764 8,349,971,974 11,502,261,739 23 1 Pa c SOCIAL CASH TRANSFER (SCT) FUNDING TO COUNCILS FOR THE FINANCIAL YEAR 2018/19 Ist Additional 2nd Additional Total Funding Number Council Financing Financing SCT I Blantyre District Council SCT - 757.125.214 757,125,214 2 Chiradzulu District Council SCT - 675.420,040 675,420,040 3 Dowa District Council SCT - 899.995,056 899.995,056 4 Dedza Distrcict Council SCT 140,341,850 1,208,089,850 1,348,431,700 5 Karonga District Council SCT - 780,086,676 780,086,676 6 Nkhotakota District Council SCT - 814,107,560 8 14,107.560 7 Kasungu District Council SCT - 1,448,724,912 1,448,724,912 8 Lilongwe District Council SCT - 2,003,636,720 2,003,636,720 9 Nkhatabay District Council SCT - 549,238,100 549,238,100 10 Ntchisi District Council SCT - 587,741,600 587,741,600 11 Rumphi District Council SCT - 393,323,125 393,323,125 Total 140,341,850 10,117,488,853 10,257,830,703.00 24 P a ge