ADAMAWA STATE EDUCATION PROGRAMME INVESTMENT PROJECT (ADSEPIP-AF) AUDITED FINANCIAL STATEMENTS FOR THE 13 MONTHS PERIOD E .E . .1 . D .CE Al .. ... ... .. .. .. ... ADAMAWA STATE EDUCATION PROGRAMME INVESTMENT PROJECT (ADSEPIP) AUDITED ACCOUNTS FOR THE 13 MONTHS PERIOD ENDED DECEMBER 31ST 2018 Contents CORPORATE INFORMATION ......................................................................... 2 PR O JEC T O B JEC T IV E ....................................................................................... 3 INDEPENDENT AUDITORS REPORT............................................................. 5 STATEMENT OF FINANCIAL POSITION...................................................... 7 STATEMENT OF FINANCIAL PERFORMANCE........................................... 8 CASH FLOW STATEMENT 9 ACCOUNTING POLICIES ........................................................... 10 NOTES TO THE ACCOUNTS ANNEX TO THEACCOUNTS ........................................................................ I6 1 Akaarji Irarrihinec& Co, .'Char1crced Accountanti,S ADAMAWA STATE EDUCATION PROGRAMME INVESTMENT PROJECT (ADSEPIP) AUDITED ACCOUNTS FOR THE 13 MONTHS PERIOD ENDED DECEMBER 31ST 2018 CORPORATE INFORMATION A. Project Financial Management and Implementation Unit: 1. Mr. Abubakar Ibrahim - Head PFMU 2. Mr. Uthman Bakari - Project Coordinator 3. Mr. Jiddah U. Boijam - Asst. Project Coordinator 4. Mr. Pius John - Project Accountant 5. Mr. Arama Gyandi - Asst. Project Accountant 6. Mr. Siddiki Liman - Procurement Officer 7. Mr. Jeneso Igawe - EMIS Officer 8. Mr. Atenka John - Communication Officer 9. Mr. Shehu Umar - Monitoring and Evaluation Officer 10.Mrs. Deborah Fwah - Gender Officer 1 I.Mrs. Gyatan B. Dilli - Project Internal Auditor B. Bankers: i. Zenith Bank Plc. (A/C No.: 1015101546) Drawdown Naira Account ii. Zenith Bank Plc. (A/C No.: 5070630997) Special Account USD C. Auditors: Akanji Ibrahim & Co. (Chartered Accountants) No. 30 Mubi Road, Sabru House, Jimeta-Yola, Adamawa State. 2 Akttji Ibrwhir & Co. Chartcrcd Acco( ,r ilS PROJECT OBJECTIVE The main objective of the State Education Programme Investment Project (SEPIP) is to support need-based teacher deployment, school-level management and accountability and measurement of student learning in participating states. The revised project development objective focuses on the need for system strengthening in the current context of the North East states. Thus, the project development objective is revised as follows: The project development objective is to strengthen the educational system by supporting: 1. Need-based teacher deployment. ii. School-level management and accountability, and iii. Measurement of student learning in the participating states. This will contribute to, and complement the programs and priorities of participating states in addressing education access, quality and efficiency issues, through their own funding financing from UBEC and other Government agencies, as well as other development partners. Project institutional and implementation arrangement At the state level, the project would be implemented through: i. The State Ministry of Education (SMOE): The SMOE will have primary responsibility for project implementation, guided by a State Project Steering Committee (SPSC), comprising inter alia the Universal Basic Education Board, the State Ministry of Finance, Planning and Budget, the State Ministry of Local Government and Chieftaincy Affairs, the Local Government Service Commission and the Governor's Office. The SMOE will be responsible, through its state project technical support unit, to plan, implement, manage and monitor project activities. ii. The Project Financial Management Unit (PFMU): Located in the Ministry of Finance, which has substantial experience and a good track record in managing bank funding, will support the SMOE in all project and financial matters. iii. The State Universal Basic Education Board (SUBEB): Which is the principal agency managing basic educational institutions in conjunction with the SMOE. !It/s(H/ Ar)Udrito cV Co. (/ tcirL(/ Acit lo,)OSH ~< iv. The Local Government Areas: Which have been entrusted by the Nigerian Constitution with the responsibility of financing and managing primary schools. v. The State Ministry of Finance, Local Government and Chieftaincy Affairs, the Local Government Service Commission, and the governor's office will also be involved in project management at the state level, through the state project steering committee. 4 Ak(voji leahm c Co. Charlcred Alcooorniants AKANJI IBRAHIM & CO. CHAITERE-D ACCOUNTANTS NIGLRIA NO.30 Mubi Road 40 Apena Street Sabru House off Ago Palace Way Okota- Isolo, Lagos P.O. Box 262 INDEPENDENT AUDITORS REPORT ON THE FINANCIAL STATEMENTS OF THE ADAMAWA STATE EDUCATION PROGRAMME INVESTMENT PROJECT (ADSEPIP) (IDA NO. 50940) We have audited the accompanying project financial statements of the Adamawa State Education Programme Investment Project for the thirteen (13) months period ended December 31 s, 2018 as set out in pages 7 to 16 prepared on the basis of the accounting policies on page 10. The project is financed by IDA No: 50940. RESPECTIVE RESPONSIBILITIES OF THE PROJECT MANAGEMENT AND AUDITORS The project management office and the project financial management unit coordinates the activities of the project and are as such responsible for preparation of the financial statements. It is our responsibility as auditors to express an independent opinion, based on our audit, on these financial statements and to report our opinion to you. BASIS OF OPINION We conducted our audit in accordance with international standards on auditing and World Bank guidelines. These standards and World Bank guidelines require that we plan and perfonn the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes examination on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the estimates and judgments made by the project officers in the preparation of financial statements, and whether the accounting policies are appropriate to the project circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give assurance that the financial statements are free of material misstatement, whether caused by fraud, other irregularities or errors. In forming our opinion, we also evaluated the overall adequacy of the presentation of the financial statement. OPINION In our opinion, the project financial statements give a true and fair view of the financial position of the project and of the cash flow statement of Adamawa State Education Programme Investment Project for the thirteen (13) months period ended December 3 1", 2018 in accordance with relevant International Accounting Standards. The Statements Of Expenditure (SOE) are in agreement with the books of the accounts and adequate supporting document has been maintained to support claims to the World Bank for reimbursement of expenditures incurred, and which expenditures are eligible for financing under the credit agreement. The statement of Special Account (SA) of the project have been prepared on the basis of cash deposit and withdrawals for purpose of complying with the credit agreement and give a true and fair view of the beginning and ending balances and the account activity for the thirteen (13) months period ended December 31st, 2018. Partner: Iliya Bathalamaus (CNA, ACA) For: Akanji Ibrahim & Co. - (Chartered Accountants) Adamawa, Nigeria. 6 ADAMAWA STATE EDUCATION PROGRAMME INVESTMENT PROJECT (ADSEPIP) STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) AS AT DECEMBER 31ST 2018. 2018 ASSETS EMPLOYED NOTE N Fixed Assets 2 144,443,834 CURRENT ASSETS Bank and Cash Balances 3 (173,817,333) DEVELOPMENT EXPENDITURE Development capital expenditure 4 1,096,764,732 Development Operating Expenditure 5 666,032,116 1,733,423,349 FINANCED BY: IDA Credit 6 1,642,205,715 Exchange Rate Gain 7 91,217,634 1,733,423.349 ......... . ...............................} STATE PROJECT COORDINATOR ............. . ............................ } HEA D PFM U 7 Ak cnj i Arhi,' I o rv (o. Chfrt-rcd AccmHoaker ADAMAWA STATE EDUCATION PROGRAMME INVESTMENT PROJECT (ADSEPIP) STATEMENT OF FINANCIAL PERFORMANCE (RECIEPT AND PAYMENT) ACCOUNT FOR THE 13 MONTHS PERIOD ENDED DECEMBER 31ST, 2018 2018 RECIEPTS IDA Funds 1,949,302,399 Other income (ERG) 91,217,634 TOTAL RECIEPTS 2,040,520,033 PAYMENTS Training and Development 263,941,538 Workshop 2,205,450 Consultancy services 49,767,860 Grand and incentives (schools) 738,095,300 Staff allowances 9,795,000 Materials supply 353,249,182 Transport and travelling 39,875,656 General maintenance 24,074,173 Printing and stationaries 20,764,062 Fuelling and lubrication 495,000 Media and publicity 50,184,153 Entertainment and Hospitality 146,676,193 Administrative expenses 3,207,822 Taxes 54,138,457 Bank Charges 906,752 Banks and construction 5,420,250 1,762,796,848 Excess of Receipts over Payments 277,723,185 8 Ikmu, [raorto oc Co. Chwurtcrcd *1 o ((O tOS( , ADAMAWA STATE EDUCATION PROGRAMME INVESTMENT PROJECT (ADSEPIP) CASH FLOW STATEMENT FOR THE 13 MONTHS PERIOD ENDED DECEMBER 31ST 2018 2018 CASH FLOW FROM OPERATING ACTIVITIES N Exchange Rate Gain (ERG) 91,217,634 Total Receipt 91,217,634 PAYMENTS Total for operating activities 666,032,116 Net cash flow from operating activities (A) (574,814,482) CASH FLOW FROM INVESTING ACTIVITIES Purchase of Assets (1,096,764,732) New Cash flow from investing activities (B) (1,096,764.732) CASH FLOW FROM FINANCING ACTIVITIES IDA Credit 1,949,302,399 Add Exchange Rate Gain 91,217,634 Net cash flow from financing activities (C) 2,040,520,033 Cash and equivalent (A+B+C) 368,940,819 Cash equivalent at the beginning - Cash and cash equivalent at the end. 368,940,819 9 tIC(f Hi, lhr(tfoito , -Co.( Chutc(l ccd 'orol,/ ADAMAWA STATE EDUCATION PROGRAMME INVESTMENT PROJECT (ADSEPIP) NOTES TO THE ACCOUNTS FOR THE 13 MONTHS PERIOD ENDED DECEMBER 31S, 2018 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The following significant accounting policies were adopted in the preparation of the financial statement; a) Basis of Preparation The accounts were prepared under the historical cost convention b) Recog!nition of Gains on Exchange Rate Gains received is recognized on actual basis as and when received c) Cost of Asset Acquisition The cost of asset acquired is written off to the Receipt and payment account in the year of acquisition. d) Foreign Currency Transaction in foreign currency in any given year are converted to naira at the rate exchange ruling at the date of transaction, outstanding balances on special accounts are reported at their naira equivalent using rates of exchange at the financial year end. e) Stock Stock are fully written off as consumable in the year of purchase. 10 AIkutij'i Ilbrahimn - Co. 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CASH AND BANK BALANCES a. Cash in hand (350,025,956) b. Zenith Bank Plc Drawdown Account No: 10 15101546 17,284,480 Naira Account c. Zenith Bank Plc Special Account No: 5070630997 USD & 460, 649.69 (,345 158,924,143 173,817,333 4. IDA FUND (N1,949,302,399) This represents amount received from IDA during the period of 13 months ended December 3111, 2018. 5. EXCHANGE RATE GAIN (N91,217,634). This represents exchange rate gain received for the period of 13 months ended December 3 1 ", 2018. 6. TRAINING AND DEVELOPMENT (;4263,941,538) This represents payment made in-respect of training held for the period of 13 months ended December 3 I't, 2018. 7. WORKSHOP (N2,205,450) This represent amount paid for workshop of staffs for the penod of 13 months ended December, 3 Pt, 2018 8. CONSULTANCY SERVICES (;449,767,860) This is represents Sundry payments for consultancy services for the period of 13 months ended December, 3 1 st, 2018. Ak((,oj*'i 10raloim a Co, Chwrlcrcd Acco,wota'lots 3 9. GRANTS AND INCENTIVES TO SCHOOLS (N738,095,300) This represents sundry payment to various schools as incentives for the period of 13 months ended December 31st, 2018 10. STAFF ALLOWANCES (N9,795,000) This represent payment for staff allowance for the period of 13 months ended December 31st, 2018. 11. MATERIALS SUPPLY (N353,249,182) This represents payments made for goods and materials supplied for the period of 13 months ended December 3 1 st, 2018. 12. TRANSPORT AND TRAVELLING (N39,875,656) This represent payment made in-respect of general maintenance for the period of 13 months ended December 31st, 2018. 13. GENERAL MAINTENANCE (N24,074,173) This represent payments made in-respect of general maintenance for the period of 13 months ended December 31st 2018. 14. PRINTING AND STATIONARIES (N20,764,062) This is represent amount paid for printing and stationaries for the period of 13 months ended December 31 st, 2018 15. FUELLING AND LUBRICATION (N495,000) This represents payments made for fuelling and lubricants services for the period of 13 months ended December 31st, 2018. 16. MEDIA AND PUBLICITY (W50,184,153) This represents payments made for media, publicity and advertisement for the period of 13 months ended December 3 s', 2018. 17. ENTERTAINMENT AND HOSPITALITY (N146,676,193) This represents payments made for entertainment and assistance for the period of 13 months ended December 31st, 2018. 14 Aku,, ji fhrohfit v, C o . Chrft cd I (((i/He '(Ife I 18. ADMINISTRATIVE EXPENSES (N3,207,822) This represent payment made for administrative expenses for the period of 13 months ended December 31st, 2018. 19. TAXES (N54,138,457) This represents the total taxes remitted to the relevant tax authorities for the period of 13 months ended December 31st, 2018. 20. BANK CHARGES (N906,752) This represents deductions for various transactions as charges for the period of 13 months ended December 31st, 2018. 21 WORKS AND CONSTRUCTION (N5,420,250) This represents payment made for civil works and constructions for the period of 13 months ended December 31st, 2018. 15 ANNEX TO THE ACCOUNTS FOR THE 13 MONTHS PERIOD ENDED DECEMBER 31ST, 2018 RECONCILIATION OF ZENITH BANK PLC DOMICILIARY SPECIAL ACCOUNT NUMBER 5070630997 Transaction Summary The summary of transactions through the domiciliary special account for the thirteen (13) months period ended 31 st December, 2018 is as shown below: $ Balance as at 1/1/2018 1,825,740.24 Add: Lodgments during the period 2,833,752.09 4,659,492.33 Less: Payments during the period 4,198,842.64 Balance as at December 31st, 2018 460,694.69 Bank Reconciliation Statement as at December 31st 2018 $ Balance as per Bank Statement 460,649.69 Same as: Balance as per cashbook 460,649.69 16 Ak