Ministry of Water and Energy (MINEA) Water Sector Institutional Development Project (WSIDP) - Angola IDA Credit N° 45010- ANG IDA credit N° 49700- AO Project ID N°: P096360 Audit report on the financial statements at 31 December 2018 June 2019 Ministry of Water and Energy (MINEA) Water Sector Institutional Development Project (WSIDP) - Angola Rua Via S8 Condominio Dolce Vita Edificio A1, Luanda, Angola Financing IDA Credit N° 45010-ANG IDA Credit N° 49700-AO Project ID N°: P096360 Audit report on the financial statements at 31 December 2018 June 2019 Mazars Cameroun SA BP 3791 Douala - Cameroun Téléphone (237) 22342 42 47 - Télécopie (237) 22342 91 70 SOCIETE ANONYME D'EXPERTISE COMPTABLE ET DE COMMISSARIAT AUX COMPTES AGREEE CEMAC SOUS LE N° SEC 034 PAR DECISION N°17/05 UEAC-010 C-CM-13 DU 07 FEVRIER 2005 I. Report on the Audit of the Financial Statements 1. Modified Opinion We have audited the accompanying financial statements of the Water Sector Institutional Development Project (WSIDP), which comprise as at 31 December 2018 the statement of sources and uses of funds, Summary sheets and statement of expenditures, a list of material assets, summary of significant accounting policies and other explanatory notes. In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying financial statements of the WSIDP for the year ended 31 December 2018 are prepared, in all material respects, in accordance with the accounting principles and methods described in the accompanying notes, the guidelines of the International Development Association and the provisions of the Financing Agreement. 2. Basis for our modified opinion i. Bank account omitted from the books of the project In 2016 the project FCMU opened a Euro Account with Banco Caixa Geral Angola with account N° AO06000400000248098515287. The transactions from this account as well as the balances are not reflected in the books and financial statements of the project. From its date of opening the account has been used to cash-in two performance guarantees as follows: - On the 5th September 2016, the performance guarantees for a total amount of 566 200,26 Euro - On the 13th April 2018, the performance guarantee for a total amount of 130 247 Euro was cashed over the contract N° PC 6W3/DAS/11 which was signed on the 25 April 2012 with Puentes Y Calzadas Infraestruturas, S.L.U for the Design and Construction of Network and Home Connections in the City of N’Dalatando. The FCMU has used a total of 38 832,31 Euro in 2018 to cover arbitration service fees paid to ACERIS Law SARL. Bank charges for a total amount of 1 188,46 Euro have been incurred. The balance in this account stands at 656 418,78 Euro USD at 31 December 2018. The transactions in this bank account have not been reflected in the books and financial statements of the project. We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Project in accordance with the Code of ethics and professional conduct of accounting professionals of the International Ethics Standard Board for Accountants [IESBA], 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 basis for our opinion. 3. Emphasis of Matter Without modifying our opinion, we wish to draw your attention to the following: - Ongoing litigation In 2017 a dispute broke between the FCMU and the Contractor over the contract N° PC 6W3/DAS/11 which was signed on the 25 April 2012 with Puentes Y Calzadas Infraestruturas, S.L.U for the Design and Construction of Network and Home Connections in the City of N’Dalatando. The object of the dispute concerns delays in completion of works as well as defects not corrected by the contractor following notification by the project manager which led to the refusal of the provisionary reception of work by same. As per the Amendment 3 to the signed contract, the intended completion date was December 27, 2016. No settlement has been arrived at after referring the matter to the adjudicator who made his decision on December 22, 2017. The litigation is ongoing at the date of our audit. 4 Ref.: 165.RAP.2019/DLA Mazars Cameroun –June 2019 4. Responsibility of the Coordinator and those in charge of Governance for the financial statements The project Coordinator is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting principles and methods described in the accompanying notes, the guidelines of the International Development Association and the provisions of the Financing Agreement and for such internal control as the Coordination determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the project coordinator is responsible for assessing the Project’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless Coordination either intends to put an end to the activities of the Project, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the project’s financial reporting process. 5. Auditor’s Responsibilities for the Audit of the Financial Statements Our 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 our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs 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. II. Report on other obligations required by the audit terms of reference. In line with the reporting requirements of the terms of reference, we equally:  Reviewed the accuracy and propriety of expenditures withdrawn under the statement of expenditure procedures. With regard to the statements of expenditure, there are sufficient supporting documents to: ‐ Justify applications for reimbursement submitted to the International Bank for Reconstruction and Development; 5 Ref.: 165.RAP.2019/DLA Mazars Cameroun –June 2019 ‐ Identify the expenditure that is eligible under the provisions of the Financing Agreement.  Reviewed that all funds provided to the Project have been used, accounted for and classified in accordance with the relevant financing agreements: We are of the opinion that the funds allocated to the Project for the implementation of Project activities have, in all material aspects, been used in accordance with the relevant financing agreement. Done at Douala, 28th June, 2019 MAZARS CAMEROUN: Auditing, Accounting and Advisory CEMAC Authorisation n° EC 592 ONECCA Registration n° ECP 242 Fidèle MMANDOA Partner 6 Ref.: 165.RAP.2019/DLA Mazars Cameroun –June 2019 ANNEX: AUDITOR’S RESPONBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We 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 our 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 the reasonableness of accounting estimates and related disclosures made by the Coordination. - Conclude on the appropriateness of Coordination’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 we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Project to cease to continue as a going concern. We 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 we identify during our audit. 7 Ref.: 165.RAP.2019/DLA Mazars Cameroun –June 2019 1. FINANCIAL STATEMENTS 8 Ref.: 165.RAP.2019/DLA Mazars Cameroun –June 2019 STATEMENT OF SOURCES AND USES OF FUND 9 Ref.: 165.RAP.2019/DLA Mazars Cameroun –June 2019 SUMMARY 1. FINANCIAL STATEMENTS 8 2. NOTES TO THE FINANCIAL STATEMENTS 15 2.1. Accounting principles and methods Erreur ! Signet non défini. 3. SUMMARY STATEMENT OF EXPENDITURE 18 3.1. Table of Global Movement of funds 19 4. RECONCILIATION OF THE DESIGNATED ACCOUNTS 23 4.1. Statement of reconciliation of the designated accounts 24 5. FRAMEWORK OF THE ASSIGNMENT 25 5.1. Context of the assignment 26 5.2. Objectives of the assignment 27 5.3. General Methodology 28 2. NOTES TO THE FINANCIAL STATEMENTS 15 2.1. Accounting principles and methods 16 2.2. Notes to the financial statements 17 3. SUMMARY STATEMENT OF EXPENDITURE 18 3.1. Table of Global Movement of funds Reconciliation table of funds received from the bank with funds disbursed by the Bank as at 31 December 2018. Designated account A- IDA Credit N° 45010- ANG Reference of the RF  Payment  Amount  Justificati Direct payment  Amount  Curre on the  Reimbursem approved by  on of  by the bank ‐  requested  ncy  designate ent  the Bank  expenses USD equivalenet  d account  N° DRF  Month   PD 061  Nov‐2018 585 117,41  EUR  585 117,41       660 012,44    PD 059  Nov‐2018 24 598,57  EUR  24 598,57       28 121,09    PD 060  Nov‐2018 429 917,04  EUR  429 917,04       484 946,42    PD 066  Nov‐2018 19 202 645,57  AOA  19 202 645,57       61 778,21    PD 052  Nov‐2018 53 822,52  USD  53 822,52       53 822,52    PD 062  Nov‐2018 338 793,74  EUR  338 793,74       383 836,37    PD 065  Nov‐2018 4 188 325,56  EUR  4 188 325,56       4 785 161,95    PD 058  Nov‐2018 25 358,89  USD  25 358,89       25 358,89    PD 055  Nov‐2018 19 949,15  EUR  19 949,15       22 601,39    PD 057  Nov‐2018 1 639 861,04  USD  1 639 861,04       1 639 861,04    PD 056  Nov‐2018 264 004,75  USD  264 004,75       264 004,75    PD 050  Nov‐2018 30 291,49  EUR  30 291,49       34 318,74    PD 068  Nov‐2018 62 828,15  USD  62 828,15       62 828,15    PD 053  Nov‐2018 125 812,84  USD  125 812,84       125 812,84    PD 049  Apr‐2018  22 613,01  USD  22 613,01       22 613,01    Designated account A- IDA Credit N° 49700- AO    Direct Payment  Value Date  N° PD  Currency  Amount Presented  Amount approved  Amount Paid  16‐Jan‐2018  PD 631  USD  30 381,46 30 381,46  30 381,46 23‐Jan‐2018  PD 632  EUR  79 796,26 79 796,26  97 646,68 24‐Jan‐2018  PD 633  USD  38 545,96 38 545,96  38 545,96 25‐Jan‐2018  PD 634  EUR  49 181,50 49 181,50  60 999,81 25‐Jan‐2018  PD 635  EUR  133 566,45 133 566,45  165 662,47 23‐Jan‐2018  PD 636  USD  329 922,53 329 922,53  329 922,53 25‐Jan‐2018  PD 637  EUR  80 738,81 80 738,81  100 140,35 24‐Jan‐2018  PD 638  USD  57 469,78 57 469,78  57 469,78 26‐Jan‐2018  PD 639  EUR  52 997,77 52 997,77  65 921,28 24‐Jan‐2018  PD 640  USD  75 714,93 75 714,93  75 714,93 24‐Jan‐2018  PD 641  USD  37 515,55 37 515,55  37 515,55 24‐Jan‐2018  PD 642  USD  27 002,80 27 002,80  27 002,80 24‐Jan‐2018  PD 643  USD  42 944,02 42 944,02  42 944,02 26‐Jan‐2018  PD 644  EUR  58 462,50 58 462,50  72 718,58 24‐Jan‐2018  PD 645  USD  96 601,40 96 601,40  96 601,40 25‐Jan‐2018  PD 646  USD  98 938,90 98 938,90  98 938,90 25‐Jan‐2018  PD 647  USD  62 741,80 62 741,80  62 741,80 29‐Jan‐2018  PD 648  EUR  171 416,86 171 416,86  212 436,91 29‐Jan‐2018  PD 649  EUR  163 650,00 163 650,00  202 811,45 25‐Jan‐2018  PD 650  USD  28 016,95 28 016,95  28 016,95 29‐Jan‐2018  PD 651  EUR  89 627,59 89 627,59  111 075,47 25‐Jan‐2018  PD 652  USD  37 807,65 37 807,65  37 807,65 30‐Jan‐2018  PD 653  EUR  210 841,52 210 841,52  262 265,77 30‐Jan‐2018  PD 654  EUR  29 125,75 29 125,75  36 229,52 26‐Jan‐2018  PD 655  USD  20 567,00 20 567,00  20 567,00 26‐Jan‐2018  PD 656  USD  99 821,44 99 821,44  99 821,44 26‐Jan‐2018  PD 657  USD  37 468,44 37 468,44  37 468,44 29‐Jan‐2018  PD 658  USD  26 233,03 26 233,03  26 233,03 31‐Jan‐2018  PD 659  EUR  25 274,22 25 274,22  31 479,04 29‐Jan‐2018  PD 660  USD  65 644,50 65 644,50  65 644,50 30‐Jan‐2018  PD 661  USD  516 658,56 516 658,56  516 658,56 01‐Feb‐2018  PD 662  EUR  41 595,34 41 595,34  51 736,28 01‐Feb‐2018  PD 663  EUR  146 183,76 146 183,76  181 823,36 06‐Feb‐2018  PD 664  USD  26 264,16 26 264,16  26 264,16 06‐Feb‐2018  PD 665  USD  20 951,54 20 951,54  20 951,54 08‐Feb‐2018  PD 666  EUR  198 292,01 198 292,01  242 570,62 21‐Feb‐2018  PD 667  EUR  156 130,10 156 130,10  192 289,83 21‐Feb‐2018  PD 668  EUR  120 000,00 120 000,00  147 792,00 21‐Feb‐2018  PD 669  EUR  39 815,95 39 815,95  49 037,32 16‐Feb‐2018  PD 670  USD  26 323,52 26 323,52  26 323,52 20‐Feb‐2018  PD 671  USD  21 266,11 21 266,11  21 266,11 02‐Mar‐2018  PD 672  EUR  17 459,88 17 459,88  21 483,51 02‐Mar‐2018  PD 673  EUR  334 104,80 334 104,80  411 099,25 02‐Mar‐2018  PD 674  EUR  211 822,01 211 822,01  260 636,39 02‐Mar‐2018  PD 675  EUR  59 067,32 59 067,32  72 679,38 27‐Feb‐2018  PD 676  USD  26 956,16 26 956,16  26 956,16 27‐Feb‐2018  PD 677  USD  378 959,35 378 959,35  378 959,35 20 01‐Mar‐2018  PD 678  USD  31 385,10 31 385,10  31 385,10 27‐Feb‐2018  PD 679  USD  186 557,85 186 557,85  186 557,85 01‐Mar‐2018  PD 680  USD  45 111,80 45 111,80  45 111,80 01‐Mar‐2018  PD 681  USD  117 665,81 117 665,81  117 665,81 06‐Mar‐2018  PD 682  USD  28 951,09 28 951,09  28 951,09 08‐Mar‐2018  PD 683  EUR  110 369,86 110 369,86  136 615,81 06‐Mar‐2018  PD 684  USD  21 359,91 21 359,91  21 359,91 06‐Mar‐2018  PD 685  USD  21 661,75 21 661,75  21 661,75 08‐Mar‐2018  PD 686  EUR  81 824,99 81 824,99  101 282,97 06‐Mar‐2018  PD 687  USD  23 656,99 23 656,99  23 656,99 08‐Mar‐2018  PD 688  EUR  20 220,35 20 220,35  25 028,75 14‐Mar‐2018  PD 689  EUR  81 824,98 81 824,98  101 254,32 09‐Mar‐2018  PD 690  USD  42 951,84 42 951,84  42 951,84 19‐Mar‐2018  PD 691  USD  105 284,36 105 284,36  105 284,36 21‐Mar‐2018  PD 692  USD  81 054,99 81 054,99  81 054,99 21‐Mar‐2018  PD 693  USD  38 046,39 38 046,39  38 046,39 21‐Mar‐2018  PD 694  USD  24 308,21 24 308,21  24 308,21 21‐Mar‐2018  PD 695  USD  102 236,86 102 236,86  102 236,86 21‐Mar‐2018  PD 696  USD  111 120,75 111 120,75  111 120,75 23‐Mar‐2018  PD 697  USD  25 358,89 25 358,89  25 358,89 27‐Mar‐2018  PD 698  EUR  24 598,57 24 598,57  30 520,68 27‐Mar‐2018  PD 699  EUR  20 447,37 20 447,37  25 370,07 23‐Mar‐2018  PD 700  USD  22 171,21 22 171,21  22 171,21 26‐Mar‐2018  PD 701  USD  31 574,36 31 574,36  31 574,36 17‐Apr‐2018  PD 702  EUR  330 014,93 330 014,93  408 277,97 13‐Apr‐2018  PD 703  USD  470 646,15 470 646,15  470 646,15 17‐Apr‐2018  PD 704  EUR  196 784,20 196 784,20  243 451,57 13‐Apr‐2018  PD 705  USD  24 000,00 24 000,00  24 000,00 17‐Apr‐2018  PD 706  EUR  23 750,00 23 750,00  29 382,31 13‐Apr‐2018  PD 707  USD  26 956,17 26 956,17  26 956,17 13‐Apr‐2018  PD 708  USD  103 075,00 103 075,00  103 075,00 16‐Apr‐2018  PD 709  USD  33 323,51 33 323,51  33 323,51 16‐Apr‐2018  PD 710  USD  22 368,51 22 368,51  22 368,51 16‐Apr‐2018  PD 711  USD  58 779,31 58 779,31  58 779,31 16‐Apr‐2018  PD 712  USD  261 678,15 261 678,15  261 678,15 20‐Apr‐2018  PD 713  EUR  81 824,97 81 824,97  100 665,17 18‐Apr‐2018  PD 714  USD  70 526,30 70 526,30  70 526,30 23‐Apr‐2018  PD 715  USD  28 722,57 28 722,57  28 722,57 25‐Apr‐2018  PD 716  USD  203 425,85 203 425,85  203 425,85 25‐Apr‐2018  PD 717  USD  24 168,27 24 168,27  24 168,27 30‐Apr‐2018  PD 718  EUR  36 308,14 36 308,14  43 920,14 30‐Apr‐2018  PD 719  EUR  36 191,66 36 191,66  43 779,24 07‐May‐2018  PD 720  EUR  107 667,84 107 667,84  128 307,76 03‐May‐2018  PD 721  USD  62 741,80 62 741,80  62 741,80 04‐May‐2018  PD 722  USD  80 498,11 80 498,11  80 498,11 04‐May‐2018  PD 723  USD  78 082,69 78 082,69  78 082,69 09‐May‐2018  PD 724  USD  55 653,00 55 653,00  55 653,00 17‐May‐2018  PD 725  USD  26 998,38 26 998,38  26 998,38 29‐May‐2018  PD 726  EUR  70 215,29 70 215,29  81 109,19 23‐May‐2018  PD 727  USD  20 126,51 20 126,51  20 126,51 29‐May‐2018  PD 728  USD  46 732,67 46 732,67  46 732,67 01‐Jun‐2018  PD 729  EUR  170 637,50 170 637,50  199 825,04 01‐Jun‐2018  PD 730  EUR  81 825,00 81 825,00  95 821,17 29‐May‐2018  PD 731  USD  32 809,21 32 809,21  32 809,21 21 29‐May‐2018  PD 732  USD  30 460,33 30 460,33  30 460,33 29‐May‐2018  PD 733  USD  26 092,64 26 092,64  26 092,64 30‐May‐2018  PD 734  USD  37 937,66 37 937,66  37 937,66 30‐May‐2018  PD 735  USD  28 934,87 28 934,87  28 934,87 04‐Jun‐2018  PD 736  EUR  33 214,28 33 214,28  38 932,12 30‐May‐2018  PD 737  USD  26 970,04 26 970,04  26 970,04 06‐Jun‐2018  PD 738  USD  77 901,40 77 901,40  77 901,40 08‐Jun‐2018  PD 739  EUR  82 042,02 82 042,02  96 288,62 08‐Jun‐2018  PD 740  EUR  22 563,50 22 563,50  26 481,65 06‐Jun‐2018  PD 741  USD  38 524,52 38 524,52  38 524,52 06‐Jun‐2018  PD 742  USD  47 253,99 47 253,99  47 253,99 06‐Jun‐2018  PD 743  USD  46 550,38 46 550,38  46 550,38 13‐Jun‐2018  PD 744  USD  48 927,81 48 927,81  48 927,81 13‐Jun‐2018  PD 745  USD  38 255,14 38 255,14  38 255,14 13‐Jun‐2018  PD 746  USD  23 787,81 23 787,81  23 787,81 19‐Jun‐2018  PD 747  EUR  104 636,59 104 636,59  120 876,19 14‐Jun‐2018  PD 748  USD  21 037,50 21 037,50  21 037,50 20‐Jun‐2018  PD 749  USD  37 055,70 37 055,70  37 055,70 27‐Jun‐2018  PD 750  EUR  16 037,88 16 037,88  18 660,07 25‐Jun‐2018  PD 751  USD  322 451,20 322 451,20  322 451,20 25‐Jun‐2018  PD 752  USD  44 739,72 44 739,72  44 739,72 25‐Jun‐2018  PD 753  USD  75 563,90 75 563,90  75 563,90 27‐Jun‐2018  PD 754  EUR  81 825,00 81 825,00  95 203,39 28‐Jun‐2018  PD 755  EUR  66 945,38 66 945,38  77 603,08 27‐Jun‐2018  PD 756  USD  25 052,93 25 052,93  25 052,93 05‐Jul‐2018  PD 757  EUR  31 473,89 31 473,89  36 780,39 20‐Jul‐2018  PD 758  USD  32 882,56 32 882,56  32 882,56 19‐Jul‐2018  PD 759  USD  37 849,20 37 849,20  37 849,20 31‐Jul‐2018  PD 760  USD  35 491,13 35 491,13  35 491,13 27‐Jul‐2018  PD 761  USD  26 251,00 26 251,00  26 251,00 27‐Jul‐2018  PD 762  USD  20 212,46 20 212,46  20 212,46 27‐Jul‐2018  PD 763  USD  140 550,83 140 550,83  140 550,83 31‐Jul‐2018  PD 764  USD  17 661,75 17 661,75  17 661,75 29‐Aug‐2018  PD 765  EUR  171 455,63 171 455,63  199 968,70 29‐Aug‐2018  PD 766  EUR  81 825,00 81 825,00  95 432,50 27‐Aug‐2018  PD 767  USD  125 338,39 125 338,39  125 338,39 27‐Aug‐2018  PD 768  USD  196 151,59 196 151,59  196 151,59 08‐Nov‐2018  PD 769  EUR  68 722,50 68 722,50  78 429,55 20‐Nov‐2018  PD 770  USD  418 403,80 418 403,80  418 403,80 22 4. RECONCILIATION OF THE DESIGNATED ACCOUNTS 23 4.1. Statement of reconciliation of the designated accounts i. Designated account for credit IDA Credit N° 45010-ANG ii. Designated account for credit IDA Credit N° 49700-ANG 5. FRAMEWORK OF THE ASSIGNMENT 25 5.1. Context of the assignment 5.1.1. Presentation of the Project The Government of the republic of Angola has negotiated a credit with the International Development Association (IDA) equivalent to 57 million USD and an Additional Financing equivalent to 120 million USD toward the cost of the Water Sector Institutional Development Project (WSIDP). The contribution of the government to the project amounts to an equivalent amount of 56,2 million USD. This initial financing is presented as follows by components: Local Foreign Total Project cost by component US $million US $million US $million Development of the institutions in the Water Sector 9,6 12,1 21,7 Water Resource Management 4,4 7,6 12,0 Rehabilitation of Water Supply Systems 21,0 30,8 51,8 Capacity building and change management 7,5 3,5 11,0 Total baseline cost 42,5 54,0 96,5 Project Preparation Facility (PPF) No. Q5620 0,3 0,5 0,8 Physical and Price Contingencies 8,0 7,9 15,9 8,3 8,4 16,7 Total project cost 50,8 62,4 113,2 The additional financing was shared into cost activities as follows: Amount of Additional Credit allocated Equivalent in Project cost by Category (expressed in SDR) in millions US $million Works 44,9 74,7 Goods and operating cost 5,6 9,3 Consultant services and training 9,3 15,5 Unallocated 12,3 20,5 Total project cost (additional financing) 72,1 120,0 5.1.2. Objectives of the Project The overall objective of the project is to strengthen the institutional capacity and efficiency of agencies in the water sector to improve access and reliability of water service delivery. The project is made of four components as follows 26 - Development of the institutions in the water supply sub-sector - Water resources management - Rehabilitation of water supply systems - Capacity building and change management 5.1.3. Financial and Contract Management Unit The Financial and Contract Management Unit (FCMU) is responsible for the implementation of various rehabilitation and expansion projects in the water sector throughout the country regardless of the sources of financing. The government staff for the FCMU will be drawn from both the water supply and sanitation and the water resource management units within DNA. The FCMU is responsible for assisting in the coordination, implementation, monitoring, evaluation and supervision of the project. The key staff technical staff for FCMU is presented as follows: ‐ Project Coordinator ‐ Senior Financial Management advisor ‐ Senior procurement specialist ‐ Procurement officer ‐ Water and Sanitation specialist ‐ Accountant ‐ Professional and administrative staff 5.2. Objectives of the assignment The objective of this assignment is the realization of the audit of accounts and the summary of expenditures of the WSIDP for the period 1st January to 31st December 2017. The procedures implemented aimed to present a professional opinion on: ‐ The annual financial statement of the project (Statement of sources and uses of funds and summary statement of expenditures) ; ‐ The statement of justification of the special account balance; ‐ The summary statement of expenditures; 27 ‐ The internal control system of the project; ‐ Compliance of the IDA guidelines in the execution of the assignment. 5.3. General Methodology Work focused on the following three areas : - Obtaining an understanding of internal documentation and interviews with operational managers ; - Review of internal control procedures. this has enabled us to present a management letter on internal contol procedures by formulating reccommendations for improvements in areas we deemed necessary with a view of efficiency in the processing of transactions and security of funds implemented and assets created through these funds - The review of project accounts. This work has resulted in the prosentation of a report on the financial statements of the project. 28 Annex 1- List of fixed assets 29