AUDITOR GENERAL'S DEPARTMENT o s no~ 40 KNUTSFORD BOULEVARD P.O. BOX 455 KINGSTON 5 JAMAICA Tel. No.: 926-8309/926-5963/926-5846 Fax Number: 968-4690 audien0alauditorseneral.zov.im. INDEPENDENT AUDITOR'S REPORT GO/IBRD LOAN No. 8334-tM Early Childhood Development Project Year Ended March 31, 2017 Opinion I have audited the accompanying Financial Statements of Early Childhood Development Project, set out on pages 1 to 8, which comprise the Statement of Sources and Uses of Funds, as at March 31, 2017, Statement of Cumulative Investments, Designated Account Reconciliation Statements for the year then ended, and a summary of significant accounting policies and other explanatory notes. In my opinion, the appended Statements 1-2 and Supplementary Financial Information reflect a fair representation of the transactions of the Programme for the period under review and the transactions conformed to the terms of the Grant Agreement and complied with the International Public Sector Accounting Standards (IPSAS) Cash Basis Basis for Opinion The audit of the Project was conducted in accordance with: * Article V Section 5.09 (b) of the Loan Agreement between the Government of Jamaica (GOJ) and the International Bank for Reconstruction and Development (IBRD) dated March 12, 2014. * International Standards of Supreme Audit Institutions (ISSAls). My responsibilities under ISSAls are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of this report. My and staff and I are independent of the Project in accordance with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA Code) and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. I believe that the audit evidence we obtained is sufficient and appropriate to provide a basis for my opinion, Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial statements of the current period. These matters were addressed in the context of the audit of the financial statements as a whole, and in forming my opinion thereon. I have determined that there are no key audit matters to report. Management's Responsibility for the Financial Statements The executing agency, the Early Childhood Commission, is responsible for the preparation and fair presentation of these financial statements, in accordance with International Public Sector Accounting Standards (IPSAS) Cash Basis. This responsibility includes: designing, implementing and maintaining internal controls, relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether, due to fraud or error; selecting and applying appropriate accounting policies that are reasonable in the circumstances. The Commission is also required to present audited financial statements to the IBRD. The attached financial statements and supplementary financial information, which are described hereunder, were submitted to me by the Commission in accordance with Article V Section 5.09 (b) of the aforementioned Loan Agreement to reflect the transactions of the Programme from its inception in March 12, 2014 to the close of the financial year at March 31, 2017. Statement 1 Statement of Sources and Uses of Funds Statement 2 Statement of Cumulative Investments Special Bank Account Statement for period April 1, 2016 to March 31, 2017 Statement of Disbursement Linked Targets Notes to the Financial Statements In preparing the financial statements, management is responsible for assessing the Project's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there are plans to liquidate the Project or to cease operations, or has no realistic alternative but to do so. Auditor's Responsibility for the audit of the Financial Statements My responsibility is to express an opinion on these Financial Statements based on my audit. I conducted my audit in accordance with the auditing standards issued by the International Organization of Supreme Audit Institutions (INTOSAI). Those standards require that I comply with ethical requirements and plan and perform the audit 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 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 in accordance with ISSAls, we 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 Project's internal control. * Evaluate the appropriateness of accounting policies used and related disclosures made by management. * Conclude on the appropriateness of 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. The conclusions are based on the audit evidence obtained up to the date of my auditor's 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 presents a true and fair view. I have communicated with the World Bank regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that was identified during the audit COMPLIANCE WITH APPLICABLE LAWS, REGULATIONS AND FINANCIAL CLAUSES OF THE GRANT AGREEMENT During the period under review, I examined compliance by the Project Implementing Unit of the Executing Agency with the applicable laws and regulations related to the Programme's financial activities and with the accounting/financial/ management clauses of the Loan Agreement No. 8334- There was general compliance with the following articles contained in the Loan Agreement Mentioned: Article III - Section 3.01: Article V of the General Conditions Article III - Section 3.02: Schedule 2- Project Execution Section 1: Subsidiary Agreement Section 11: Project Monitoring Reporting and Evaluation Section Ill1 Procurement Section IV: Withdrawal of Loan Proceeds OPINION - GENERAL In my opinion, the Project maintained an adequate accounting system based on separate and clearly identifiable accounts which enabled the recording, monitoring and reporting of the operations and costs under the programme in accordance with satisfactory accounting/financial/management practices and standards as required by the terms of the Grant Agreement Article V, Section 5.09 (A) of the Loan Agreement. AUDIT OF THE SPECIAL BANK ACCOUNT I have examined the appended Designated Account Reconciliation Statement, reflecting the movement in the Designated Bank Account for the period ended March 31, 2017. The Designated Bank Account No. 810088 is maintained in United States Dollars in the name of the Ministry of Finance. My examination was made in accordance with the standards of the International Organisation of Supreme Audit Institutions (INTOSAI) and accordingly included such tests of the accounting records and other procedures I considered necessary. OPINION- SPECIAL BANK ACCOUNT In my opinion, the Designated Account Reconciliation Statement reflects the total amount advanced to the Designated Account at March 31, 2017 as reconciled to the outstanding amount advanced to the account as at March 31, 2017 in conformity with IPSAS Cash Basis and IBRD guidelines. Auditor General of Jamaica Date AUDITOR GENERAL'S DEPARTMENT 40 KNUTSFORD BOULEVARD P.O. BOX 455 KINGSTON 5 JAMAICA Tel. No.; 926-8309/926-5963/926-5846 Fax Number: 9684690 Email: audgen@auditorgeneral.gov. GOTIBRD LOAN No. 8334-IM Early Childhood Development Project Year Ended March 31. 2017 AuDrr OF STATEMENTS Op EXPENDITURE (SOE) PROCEDURES In the course of the Audit of the Early Childhood Development Project (ECDP) for the year ended March 31, 2017, I examined the following statements of expenditure submitted to the IBRD during the financial year under review in support of applications for reimbursement of funds from the Loan Account in accordance with the Loan Agreement: Disbursement Number Date Advanced Amount (USS) JECDP2-05 June 06, 2016 64,425.22 JECDP2-06 August 08, 2016 1,500,000.00 JECDP2-07 March 20, 2017 390,000.00 JECDP2-08 March 28, 2017 390000.00 Total 2344.425.22 The examination was done in accordance with generally accepted auditing standards and procedures prescribed by INTOSAI and accordingly, included such tests as the verification of the internal control systems and of the accounting records, tests of the origin and eligibility of expenditures, certification and procurement procedures for goods and services, filing of supporting documents and such other auditing procedures as I considered necessary in the circumstances, Opinion In my opinion, the statements of expenditure and the annexes submitted in support of them, together with the internal controls procedures used in their preparation can be relied upon to support the applications for advance in conforming to the requirements of the Grant Agreement. Auditor General of Jamaica Date  ECD Project Phase II - IBRD Loan No. 83340 Financial Statements For the period ending March 31, 2017 Contents Page Statement of Sources and Uses of Funds I Statement of Cumulative Investments 2 Reconciliation of the Project Special Account 3 Statement of Disbursment linked Indicators 4 Notes to the fhe financial statements 5 to 8  ECD Project Phase II- IBRD Loan No. 83340 Statement of Sources and Uses of Funds Year Ended March 31, 2017 Current Period Cumulative from June Cumulative to March 2017 2014 to March 2016 RECEIPTS Note US$ US$ US$ World Bank Reimbursement Part 1 5,600,000.00 2,280,000.00 7,880,000.00 Retroactive Reimbursement - PartI - - Designated Account (Advance) 165,081.35 64,425.22 229,506.57 Front End Fee 30,000.00 - 30,000,00 Total Receipts (A) 5,795,081.35 2,344,425.22 8,139,506.57 LESS EXPENDITURES Partl Supporting the implementation of the NSP 5,600,000.00 2,280,000-00 7,880,000.00 Part 2 Intuitional Strengthening 129,506.57 88,742.80 218,249.37 Front end fee 30,000.00 30,000.00 Total Expenditures (B) 5,759,506.57 2,368,742.80 8,128,249.37 RECEIPTS LESS EXPENDITURES Net Change in Cash (A-B) 35,574.78 (24,317.58) 11,257.20 BANK BALANCES Opening Cash Balances Opening Cash Balance on Designated Account 35,574.78 Net change In Cash (24,317.58) Closing Cash Balance on Designated Account 35,574.78 11,257.20 11,257.20 Total Closing Balances 3 c 35,574.78 11,257.20 11,257.20 The financial statements on pages 1 to 8 were approved by the Commission on September 26, 2017 and signed on its behalf by: qL 1k1qJ Chairman - Early Childhood Commission Mrs. Trsha-Williams-Singh Executive Director (Acting) Mrs. Karlene Degrasse-Deslandes Page 1  ECD Project Phase II - IBRD Loan No. 83340 Statement of Cumulative Investments Year Ended March 31, 2017 Current Year 2017 Cumulative to Cumulative from June 2014 to March 31,2017 March 31, 2016 Categories US$ US$ US$ Category 1. Grants to Community Schools and Grants for ECC under Part 1 of Project 5,600,000.00 2,280,000.00 7,880,000.00 Category 2. Goods Training and consultant's services under Part 2 of the Project. 129,506,57 88,742.80 218,249.37 Front-end Fee 30,000.00 30,000.00 Total 5,759,506.57 2,368,742.80 8,128,249.37 The financial statements on pages 1 to 8 were approved by the Commission on September 26, 2017. and signed on its behalf by: 1- 1 I JO I Mrs. Trisha-Williams-Singh Chairman - Early Childhood Commission Mrs. Karlene Degrasse-Deslandes Executive Director (Acting) Page 2  ECD Project Phase II - IBRD Loan No. 83340 DesIgnated Account Reconciliation Statement Year Ended March 31, 2017 Account Number 810088 with Bank of Jamaica US$ 1 Total advance by world bank (or cofinancier) $ 229,506.57 2 Less: Total amount documented by World Bank $ 1291506V 3 Present OutstandIng Amount advanced to the designated account (1-2) $ 100,000.00 4 Balance of Designated Account per attached bank reconciliation as of date March 31,2017 $ 11,273.33 5 Plus : Total amount claimed in this application no .JECD2-11 $ 88,742.80 6 Plus: Total amount withdrawn and not yet claimed Reason 7 Plus : Amounts claimed in previous apilicadons not yet credited at date of Bank Statements Aplication NO WA# WA# Subtotal of Previous Appplications Not yet Credited 8 Less:Interest Earned 9 Total Advance accounted for (NOA Through NO.9) $ 100,016.I3 10 Difference (3-9) $ (16.13) 11 Explanantion of Any Difference Shown in Line 10 Accumulated interest paid for December 2016 not transferred out of account January 2017. The financial statements on pages 1 to 8 were approved by the Commission on September 26, 2017. and signed on its behalf by: Chairman - Early Childhood Commission Mrs. Trisha-Williams-Singh Executive Director (Acting) Mrs. Karlene Degrasse-Deslandes Page 3  ECD Project Phase II - IBRD Loan No. 83340 Statement of Disbursement Linked indicators (DLT )Achleved. Year Ended March 31, 2017 Transaction Value NO. Description of DLI DLI Amount Date Achieved Date USS 1 At least 25% of parenting education and support Programs Certified 1,200,00000 MET 2013-2014 21-Oct-14 At least 90% of the Development Officers using the Classroom 2000.00 MET 2013-2014 21-Oct-14 2 Observation Tool (COT), 3 At least 54% of ECIs have received a permit to Operate 1,200,000.00 MET 2013-2014 21-Oct-14 At Least 30% of all early childhood parenting education and support 4 programs certified,(OLT 2). 500,000.00 MET 2014-2015 05-Oct-15 At Least 30% of ECis are implemeting their Improvememnt Plans, (DLT 5 11). 500,000.00 MET 2014-2015 05-Oct-15 At least 30% of ECIs praclitioners are qualified at level 11l and above, 6 (DLT 15). 500,000.00 MET 2014-2015 05-Oct-15 ECC Annual Publication reports on the performance of ECD sector and 7 NSP2012-2018 500,000.00 MET 2014-2015 05-Oct-15 8 At least 40% of ECIs are implemeting their improvement plans ,(DLT 13) 500,000.00 MET 2015-2016 19-Aug-16 At least 35% of ECIs practitioners are qualified at Level Ill and above 9 (DLT 16). 500,000.00 MET 2016-2017 19-Aug-16 10 At Least 55%of all ECIs have received a permit to operate (DLT12). 500,000.00 MET 2016-2017 19-Aug-16 A communication strategy to educate parents and raise awareness about ECD,early simulation nutrition and other parenting practices is being 11 implemented,(DLT3). 390,00.00 MET 2015-2016 20-Mar-17 The Readiness evaluation for children at age4 has been implemented as part of the countrys national assessment program and results presented 12 to the MOE, (DLT 20). 390,000.00 MET 2016-2017 28-Mar-17 TOTAL 7,880,000.00 The financial statements on pages 1 to 8 were approved by the Commission on_Septemberl6, 2017 and signed on its behalf by: ! x 0 Chairman - Early Childhood Commission Mrs. Trisha-Williams-Singh Executive Director Mrs. Karlene Degrasse-Desiandes Page 4  The Early Childhood Development Project Loan Number 83344M Notes to the Financial Statements For the period ended March 31, 2017 1. The Project The Early Childhood Development Project ("the Project") is a project being undertaken by the Government of Jamaica to improve the overall early childhood care and educational services. The Project is financed by the International Bank for Reconstruction and Development (IBRD) through a US$12,000,000.00 loan. The duration of the loan is for four years commencing June 10, 2014 and ending on September 28, 2018. The Early Childhood Development (ECD) Project's objectives are to improve the quality of and increase access to ECD services, while providing technical assistance to strengthen the organizational and institutional arrangements that govern the ECD sector. The Project is executed by the Early Childhood Commission (ECC), a statutory agency of the Ministry of Education. A Steering Committee, headed by the Permanent Secretary of the Ministry of Education has been organized to provide inter-agency co-ordination, policy guidance and oversight during implementation, although the Early Childhood Commission is responsible for the day-to-day activities of the project. The Project supports the Jamaica's National Strategic Plan for Early Childhood Development through its seven target areas including: i. parenting education and support; ii. preventive health care for children 0-6 years old; iii. screening, diagnosis and early intervention; iv. safe, learner centred early childhood facilities; v. effective curriculum delivery by trained early childhood practitioners; vi. early childhood sector governance; and vii. timely, clear and current appropriate information to support evidence-based decision making. 2. COMPONENTS OF THE ECD PROJECT The project consists of two components, and each will be carried out under different financing ond implementation arrangements as follows: a) Component I - Sector-Wide Approach (SWAP) will co-finance the implementation of the National Strategic Plan (NSP). This component will be implemented by the ECC and the MOE and will use the SWAP modalities valued at US$1 1.0M. Page 5  The Early Childhood Development Project Loan Number 8334-JM Notes to the Financial Statements For the period ended March 31, 2017 2. COMPONENTS OF THE ECD PROJECT CONT'D b) Component 2 valued at US$0.97M will consist of technical assistance and will finance consultant services procured and managed by the ECC that are critical to achieving the objectives of the NSP. This component will be implemented by the ECC and will use standprd financing and implementation arrangements, such as planning of activities, the development of terms of reference, selection of qualified consultants, and the review of work programmes Lid deliverables. 3. Statement of compliance, basis of preparation and significant accounting policies a) Statement of compliance and basis of preparation: The statements are prepared in accordance with International Public Sector Accountifg Standards (IPSAS) Cash Basis. Under this basis income is recognized when funds are recei vd rather than when requested and expense are recognized when payment is made rather thin when obligations are incurred. The Project financial statements have been prepared using the historical cost basis. b) Significant accounting policies I. Foreign currency translation Expenditure in Jamaica dollars paid from the United States dollars project acco mit (special account) held with Bank of Jamaica ("the bank"), were converted at the rat pf exchange applied by the bank at the date withdrawal request were received. During the period, the rates of exchange applied by the bank ranged from J$114.6891 to J$124.9685 to US$1. The balance of the Projects special account at the closing average rate of exchange which was applicable as at March 31, 2017 was J$124.9685 to US$1. II. Property, plant and equipment Equipment and other fixed assets acquired with the Project resources are recorded at their acquisition cost at the date of purchase. Depreciation is not charged on thes assets and as such no depreciation charge is reflected on these financial statements. Page 6 -a . daa-1 a -il=Mme -- • The Early Childhood Development Project Loan Number 8334-M Notes to the Financial Statements For the period ended March 31, 2017 1il, Revenue recognition Reimbursements and advances are recorded on the cash basis. No interest incom is recognised when received, interest earned is transferred out of the Project spe ,pl account at the ending of each month by Bank of Jamaica. c) Available Cash balance The available cash balance as at March 31, 2017, in the Project bank account was: March 31 ,2017 March 31,2016 US$ US$ Available Cash Balance 11,257.20 35,574.78 11,257.20 35,574.78 5. Disbursement requests from World Bank The following disbursement requests were made during the period: Component I i# Request Amount Amount Amount recorde in the Disbursement # requested approved by Project's financial statements IBRD Apri 11, 2014 to N 0)rch 2017 US$ US$ US$ 2014-2015 JECDP2-01 8110/2014 3,600,000.00 3,600,000.00 ,.600,000.00 2015-2016 JECDP2-04 22/07/2015 2,000,000.00 2,000,000.00 0O00,000.00 2016-2017 JECDP2-06 18/8/2016 1,500,000.00 1,500,000.00 1j600,000.00 JECDP2-07 20/3/2017 780,000.00 390,000.00 390,000.00 JECDP2-08 28/3/2017 390,000.00 390,000.00 B90,000,00 Cumulative balance 8,270,000.00 7,880,000.00 "880,000.00 Page 7 - L -a-- -- . r -se w--a --i-- ." . -a--i- -a-rl-as re- . -a -a--i- æ•s-a 4 -a-- . a -a-r -- a eld - -ra The Early Childhood Development Project Loan Number 8334-JM Notes to the Financial Statements For the period ended March 31, 2017 Component 1 Swap The disbursement drawdown twelve (12) DLT's achieved to date, was transferred to the Government ( Jamaica Consolidated fund to assist with the financing of GoJ's recurrent sector-wide budget. Component 2 AmountAmount recorded in Amout Amuntthe Project's financi Disbursement # Request date Amount approved by Amun recore in 7 requested IBRD statements April 1,' 2014 to March 2017 US$ US$ US$ 2014-2015 JECDP2-02 (Advance) 2/12/2014 100,000.00 100,000.00 100,00(.0O 2015-2016 JECDP2-03 9/7/2015 65,081.35 65,081.35 65,08 . 5 2016-2017 JECDP2-05 06/6/2016 64,425.22 64,425.22 64,42 .2 Cumulative balance 229,506.57 229,506.57 229,50 4i 6. Revolving Fund/ Special Account Advance The Project's special account maintained a revolving fund up to US$100,000 and equivalent to 10,310 f component 2 loan amount. An amount of US$88,742.80 was expended in 2016-2017 from the Proje l's special account. 7. Property, Plant and Equipment There were no fixed assets purchased during the year for the Project. Page 8 叮、兀一’&＿日江二么二江二二曰二二斗三江二二二二L日亡二日二二日二二日江二二二江江二二二二二日江巡二＇_&＿、一二．__.