Please address all correspondence To Chief Executive Officer File ref: In reply, please quote the file reference GOVERNMENT OF SAMOA MINISTRY OF FINANCE 24th December 2019 Ms. Janet Gamarra Governance Specialist Financial Management SACEP World Bank Office, Sydney Australia Dear Ms. Gamarra, Re: AUDIT OPINION, MANAGEMENT LETTER AND AUDITED ACCOUNTS - IDA No. 50890 & TF12179 SAMOA AGRICULTURE COMPETITIVENESS ENHANCEMENT PROJECT: YEAR ENDED 30th JUNE 2019 (FINAL AUDIT) We submit herewith as required under the Financing agreement the final audit report and audited statements for the above project for the period ending 30" June 2019. The following are attached for information and appropriate actions. 1. Audit report/audit opinion 2. Audited Statements 3. Management Letter Should you have any queries, please do not hesitate to contact us. Yours sincerely, Sheres tene Kirifi) For: CHIEF EXECUTIVE OFFICER cc: Saoleititi Maeva Betham Vaai, WB Liaison Officer - Samoa Office Tilafono David Hunter, Chief Executive Officer - Ministry of Agriculture Private Bag APIA, SAMOA Telephone: (685) 34333/34334 E-Mail: mof@mof.,gov.ws Fax: (685) 21312, 24779 Telephone: 27751 P.O Box 13 Fax: 24167 APIA, SAMOA Email: Info@auClit.gov,ws Website: www.audit.gov.ws to tho Controllor and Audflor Genoal AUDIT OFFICE REPORT OF THE AUDIT OFFICE TO THE GOVERNMENT OF SAMOA (MINISTRY OF FINANCE) We have audited the accompanying financial report for Samoa Agriculture Competitiveness Enhancement Project categorized as IDA Credit No. 50890and Grant No. TF 12179, for the financial year ended 3011 June 2019. The accompanying financial reports comprise of the Statement of Receipts and Payments, Statement of Comparison of Actual and Budget amounts, and a summary of significant accounting policies and other explanatory notes. Audit Opinion In our opinion, the financial statements present fairly, in all material respects, the Receipts and Payments of the Samoa Agriculture Competitiveness Enhancement Project categorized as IDA Credit No. 50890and Grant No. TF 12179, for the year ended 30 June 2019 and in accordance with the International Public Sector Accounting Standards (Cash Basis). Basis of the Opinion We conducted our audit in accordance with International Standards on Auditing (ISA). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of Financial Statements section of our report. We are independent of the Ministry of Finance and the Ministry of Agriculture and Fisheries in accordance with the ethical requirements that are relevant to our audit of financial statements in Samoa, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Responsibility for the Financial Report The accompanying set of financial report is the responsibility of the management of the Implementing Agency; Ministry of Agriculture and Fisheries supported by the Executing Agency; Ministry of Finance. The policy of the National Executing Agency; Ministry of Finance, is to prepare the financial report in accordance with the requirements of the Donor(s) and on the cash disbursements basis. On this basis, donor funds are recognized when received and expenditure is recognized when paid rather than when incurred. The Implementing and Executing Agencies are also responsible for monitoring and ensuring all relevant project arrangements are in accordance with the terms and requirements agreed upon with the Donor, and ensure that all relevant program arrangements and activities are aligned with these terms and requirements. They are also responsible for any such internal control it determines as necessary to enable the preparation of financial reports that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial reports based on our audit. We conducted our audit in accordance with international Standards on Auditing (ISA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial reports are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial reports. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement in the financial reports, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the preparation of the project financial reports 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 controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of judgments made by management, as well as evaluating the presentation of the financial reports. We believe that the audit evidence we have obtained is sufficient and appropriate to provide basis for our audit opinion. Apia, Samoa Jaslyn T Mariner - Leota 24 December 2019 ASSISTANT CONTROLLER AND AUDITOR GENERAL SAMOA AGRICULTURE COMPETITIVENESS ENHANCEMENT PROJECT IDA CREDIT No. 50890 & GRANT No. TF 12179 Project Financial Statements for the Financial Year ended 30 June 2019 1. Management Verification 2. FYI 8/19 Project Financial Statement Ending 30"' June 2019 SAMOA AGRICULTURE COMPETITIVENESS ENHANCEMENT PROJECT IDA 50890 & TF 12179 Project Accounts For the Financial Year Ended 30 June 2019 I, Leasiosiofa'asisina Oscar Maliclegaoi. Chief Executive Officer, of the Ministry of Finance, Apia, Samoa verify that: - the accompanying Project Accounts for the year ended 30 June 2019, are to the best of my knowledge, a correct and accurate record of transactions for the said period. (Leasiosio?fa'as ina Oscar Malielegaoi) CHIEF EXEC TIVE OFFICER Dated: 24 December 2019 SAMOA AGRICULTURE COMPETITIVENESS ENHANCEMENT PROJECT (SACEP) FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2019 SAMOA AGRICULTURE COMPETITIVENESS ENHANCEMENT PROJECT (SACEP) FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2019 CONTENTS Page(s) 1. Report of the Auditor 1 2. Certification by Projects Management 2 3. Statement of Receipts and Payments 3 4. Statement of Comparison of Budget and Actual Amounts 4 5. Notes to the Financial Statements 5-7 SAMOA AGRICULTURE COMPETITIVENESS ENHANCEMENT PROJECT CERTIFICATION BY PROJECT MANAGEMENT FOR YEAR ENDED 30 JUNE 2019 We certify that the attached financial statements for the Samoa Agriculture Conpetitiveness Enhancement Project (SACEP) comprise of the Statement of Receipts and Payments, Statement of Comparison of Budget and Actual Amounts, and notes forming part of the financial statements for the period from 01 July 2018 to 30 June 2019. a) give a true and fair view of the matters to which they relate; and b) have been properly drawn up in accordance with the accounting policy described in Note 2 to the financial statements. We are not aware of any circumstances which would render any particulars included in the financial statements to be misleading or inaccurate. We authorise the attached financial statements for issue on ... /...... 2/ .n behalf of the Management of the Ministry of Agriculture and Fisheries Project. Sign6ture Signature Leasiosiofa'asisina Oscar Malielegaol Tilafono David Hunter Chief Executive Officer Chief Executive Officer Ministry of Finance MAF Apia, Samoa Apia, Samoa Page 2 SAMOA AGRICULTURE COMPETITIVENESS ENHANCEMENT PROJECT STATEMENT OF RECEIPTS AND PAYMENTS FOR YEAR ENDED 30 JUNE 2019 Notes 30 JUNE 2019 30 JUNE 2018 PROJECT TO DATE Receipts/ Receipts/ Payments Payment by the Payments Payment by Receipts/ Payments Payment by Payments ~ ~ ~ th Pamntb te Pamnt Controlled by the Third Partyi Controlled by the the Third CURRENCY - $SAT entity the entity Party entity Party CBS RECEIPTS External Assistance 4 Grant No. TF12179 4.i 10,744,494 1,307,526 IDA Credit No. 50890 4,Ii 1,591,511 1,001,862 3,637,405 17,138,360 1,001,862 Government Counterpart (FYI819) Prefinanced Expenditure by GoS 5 846,679- 3,282,342 292,248 Reimbursement Prefinanced Expenditures (1,548,696) (2,288,076) Unreported Prefinanced Expenditure by GoS from FY1617 627,730 Other Receipts Reversal of AFCRP Payment 168,994 168,994 Reversal of SAFPROM Payment 7.1i 8,200 8,200 Total Receipts 897,693 1,001,862 4,800,665-n 28,980,026 2,309,388 PAYMENTS Programme Activites Expenditure Component 1: Livestock Development & Marketing 1,095,377 2,030,521 11,441,665 Component 2: Fruit & Vegetables Development & Maktig27,725 309,181 1,423,923 Marketing Component 3: Institutional Strengthening 675,876 2,251,252 17,330,493 1,307,526 Component 4: Small Scale Slaughter Facilities 1,001,862 1,001,862 Non Project Expenditure 10,699 Overstated Expenditure 6.i 22 (5,654) 22 Total Payments 6 1,799,000 1,001,862 [i 4,595,999 30,196,104 2,309,388 Exchange Fluctuation Gain/(Loss) 8 17,509 10,195 88,965 increase/(Decrease) in Cash (883,798) - 214,861 - (1,127,113) Cash at Beginning of Period 883,798 668,937 Cash at End of Period 7.i 0 883,798 - (1,127,113)- This statement of receipts and payments must be read in conjunction with the accompanying notes, SAMOA AGRICULTURE COMPETITIVENESS ENHANCEMENT PROJECT STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS FOR YEAR ENDED 30 JUNE 2019 Notes Difference Revised Cumulative Cumulative Cumulative Budget & Actual Revised Final Original Actual CURRENCY - $SAT Amount Budget Budget Amount $ $ $ CASH INFLOWS External Assistance Grant No. TF12179 12,052,020 13,150,000 13,150,000 1,097,980 IDA Credit No. 50890 18,140,222 19,009,640 21,040,000 869,418 Prefinanced Expenditure by GoS 919,978 0 (919,978) Total Receipts 9.i 31,112,220 32,159,640 34,190,000 1,047,420 CASH OUTFLOWS Component 1: Livestock Development & Marketing 11,441,665 11,384,365 12,103,104 (57,300) Component 2: Fruit & Vegetables 1,423,923 6,838,745 7,270,501 5,414,822 Development & Marketing Component 3: Institutional S nentI inl 17,330,493 13,936,529 14,816,395 (3,393,964) Strengthening Component 4: Small Scale Slaughter 1,001,862 (1,001,862) Facilities Total Payments 9.i 31,197,944 32,159,640 34,190,000 961,696 Exchange Fluctuation Gain/(Loss) 88,965 (88,965) Net Cash Flow 3,241 - - (3,241) This statement of comparison of budget and actual amounts must be read in conjunction with the accompanying notes. SAMOA AGRICULTURE COMPETITIVENESS ENHANCEMENT PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30JUNE 2019 1. GENERAL INFORMATION The Government of Samoa(GoS) through the Implementing Agency - Ministry of Agriculture & Fisheries (MAF), has received a Grant from the Food Price Crisis Response Mutli-donor Trust Fund(Trust Fund) administered by Iaternational Development Association (IDA) of the World Baik (WB);and a Credit from IDA to support fruit and vegetable growers and livestock producers to inpirove their productivity and take greater advantage of market opportunities. The project consists of the following parts: 1. Livestock Production and Marketing 2. Fruits and Vegetables Production and Marketing 3. Institutional Strenglrtening The Samoa Agriculture Competitiveness Enhancement Project (SACEP) Grant and Credit Financing agreements were officially signed on 4th May 2012. The total value of the Grant is USD5,000,000, and soft term Credit from IDA of SDR5,200,000 which is equivalent to USD7,92 millibn at the time of signing. As required in both agreement, a Designated Account (DA) was established with the Central Bank of Samnoa (CBS), The purpose of the DA is to receive Grant and Credit financing funds and to settle projects payments, mainly forelgn currency payments. A project account was created on the Finance One System under the Ministry of Finance to settle project payments, mainly local payments. 2. SUMMARY OF ACCOUNTING POLICIES 2.i BASIS OF PREPARATION The financial statements of the SACEP has beern prepared in accordance with the IPSAS cash basis and align to IPSAS Standard Preseutation. Expenses are recognised when they are paid, and revenue are recognised when they are received. Therefore there is no recording of account payable, as there is no accruing of liabilities. The Project Unit at MAF prepare paperwork and supporting docunents received from suppliers once activities are approved. The Project does purchase assets and are recorded as project assets. The accounting policies have been applied consistently throughout the reporting period. 2.i FUNCTIONAL AND PRESENTATION CURRENCY The financial statements are presented in Samoan Tala ($SAT), which is the functional local currency of the country. All values presented in SAT have been rounded to the nearest Tala. Transactions in USD, in the C3S DA 06-071 are translated Into SAT using the CBS exchange rate on the day of the transactions. 2.ill FINANCIAL SYSTEM The project maintains SACEP Company file in MYOB Accounting Package as an independent financial reporting system to record all its financial records as required under the Project Implementation Manual (PIM). 2.iv CASH Cash in the Statetement of Receipts and Payments comprise of cash balance in 03 which represents cash balance in the CBS DA 06-071 and the Finance One Account (2051-89-000) operated by the Ministry of Finance on payment of project expenses. 2.v RECEIPTS Advanced arnd reimbursements from IDA for both the Grant Trust Fund and Credit are received front the WB by way of withdrawal applications. Also direct payments requested by GoS are made by the WB by way of withdrawal application. The pre-financed expenditures by GoS during the period are recognised as receipts in accordance with 2.1. 2.vi PAYMENTS & PROCUREMENT All payments of expenditures made to suppliers for goods and services are related to the SACEP. Payments are approved in accordance with threshold policy for MAF and are subsequently paid by the Ministry of Finance, in compliance with procurement plan and financing agreements. Payments are paid either from CBS DA 06-071 or GoS funds and reimbursed from IDA by filing Withdrawal Application as required under the Grant and Credit financing Agreement. 3. FINANCIAL PERIOD Tire financial statements for the SACEP Project is for the year ended 301une 2019 and are for a twelve months period. Page 5 4. GRANT AND CREDIT FINANCING FY18/19 FY17/18 4.1. Received from Grant Trust Fund Nil Nil 4.1i Received from IDA Credit - Replenishment of CBS - DA (06-071) WA 14 665,696 - Reimbursement of Pre-financing WA 15 1,659,791 - Reimbursement of Pre-financing WA 16 628,285 - Replenishment of CBS - DA (06-071) WA 17 683,633 3,637,405 - Replenishment of CBS - DA (06-071) WA 18 42,814 - Reimbursement of Pre-financing WA 19 833,763 - Reimbursement of Pre-financing WA 20 677,557 - Documentation of CBS - DA (06-071) WA 22 - Documentation of CBS - DA (06-071) WA 24 - - Reimbursement of Pre-financing WA 25 37,376 - Documentation of CBS - DA (06-071) WA 30 - 1,591,511 - Direct Payment (Zheng Construction) WA 23 466,386 - Direct Payment (Zheng Construction) WA 26 445,279 - Direct Payment (Kramer Ausenco) WA 27 22,549 - Direct Payment (Kramer Ausenco) WA 28 67,647 1,001,862 - 2,593,372 3,637,405 S. PREFINANCED EXPENDITURE These are projects expenditures paid using GOS funds during the period, and to be reimbursed later from the Grant Trust Fund and Ida Credit 6, TOTAL PAYMENTS FY18/19 FY17/18 $ 2,800,864 $ 4,595,999 Prefinanced Expenditures by GoS 846,679 3,282,342 CBS DA Expenditures 952,301 1,313,658 Direct Payments . 1,001,862 G.i Non Project Expenditures: - PSES Consult (Sam Sesega) - Safeguard Consultant (SAFPROM) 8,251 Reversal of payment from PPA CBS-DA Account (8,229) 22 7. CASH AT END OF PERIOD 7.1 Represented by the Closing cash balance of the project CBS DA converted to SAT using the CBS exchange rate at the end of the reporting period in accordance with IPSAS Cash basis format.The CBS exchange rate at the end of tie period was 0.38013. The Cash at end of period for FY17/18, is the audited closing balance representing the project CBS DA running balance it SAT plus the balance of the prefinanced expenditures on MoF Finance One Account 2051-89 FY18/19 FY17/18 CBS DA 06-071' $ 0 $ 883,798 Cash balance as at 30 June 2019 is NIL and account Is closed Project to Date debit balance is noted as cost overruns of the project and was pre-financed by the 005 7.ii Other Receipts FY18/19 FY17/18 Non Project Expenditures: Reimbursement of Pre-financing - 4 March 2019 (39,408) Balance transferred to Treasury Account - 28 June 2019 31,209 (8,200) 8. FOREIGN EXCHANGE FLUCTUATION The foreign exchange gain reported is the sun of FX (gain/loss) incurred at the end of each quarter for the audited period. The balances of each quarter are compared to the SAT equivalent using the end of quarter rate. FY18/19 FY17/18 FOREIGN EXCHANGE FLUCTUATION $ 17,509 $ 10,195 9. FACILITY AVAILABLE Grant and Credit Financing in historical figures including remaining balance/undisbursed as at 30 JUNE 2019.The Grant and Credit were utilised almost fully, with cancelled amount of USD415.3 and USD122,430.68 respectively. 91i Samoan Tala(SAT) Remaining Balance /Undisbursed Original Budget Total Revised Disbursed as at as at as per PAD Budgeth 30 June 2018' 30 June 2018 Counterpart Funding- Prefinanced - 919,978 (919,978) IDA Credit Financing 21,040,000 19,009,640 18,140,222 869,418' Grant Trust Fund Financing 13,150,000 13,150,000 12,052,020 1,097,980d 34,190,000 32,159,640 31,112,220 (919,978) Page 6 Converted USD to SAT using the conversion rates from client connection below 'Converted to SAT using the actual rates of the date of transactions d Amount reported of $1,097,980 and $869,418 are indicative figures for budget comparison and reporting, based on the conversion to SAT of original Grant amount of US0 Sm and Credit amount of USD 8m using the exchange rate at end of June 2019, compared to the actual utilisation of the financing by the end of June 2019. The variance is due to foreign currency fluctuation over the period of Implementation. Different exchange rate at time of signing, the time of actual utilisation over the period of the project, and the exchange rate used for reporting at the end of the financial year. However, it should be noted that the actual remalining Grant Tr is USD415.30 and Credit balance of USD122,430.68 was cancelled at end of disbursement grace period of the project 30 April 2019, 9,ii United States Dollars(USD) Remaining Balance / Original Budget Total Revised Disbursed as at Undisbursed as at 30 as per PAD B udget 30 June 2019 June 2019 Counterpart Funding- Prefinanced - 349,801.43 (349,801) IDA Credit Financing 8,000,000 7,228,000 7,097,866 122,431. Grant Trust Fund Financing 5,000,000 5,000,000 4,999,585 415' 13,000,000 12,228,000 12,447,252 (219,252) Converted SDR to USD using the conversion rates from client connection below Cancelled anount as per Client Connection 9.ill Special Drawing flights (SDR) Total Revised Remaining Balance/ Original Budget Budget Disbursed as at Undisbursed as at as per PAD 30 June 2019 30 June 2019 IDA Credit Financing 5,200,000 5,200,000 5,120,420 79,580 9Jv Conversion rates from client connection 30-Jun-19 1XDR=1USD 1.39 1USD= 1 SAT 2.63 10. FOREIGN EXCHANGE RATE The exchange rate as at 30 June 2019 obtained from WB Client Connection website are used in translating foreign currency to local currency for budget comparisons purposes as per Note 9. Page 7