rr r r rr rr rr r r rr r fl AUDT REOR FO 'tHEPRO r: r Prepared by: Matengo & Associatesr Certified Public Accountants (K)r Financial & Manageflent Consultants P. O Box 67603-00200r Nairobi Kenya S Tel +254 20 2373661/020-2420016F Email: info@matengo-associates.com Website: www.matengo-associates.co.ke r r flf flf fl rT-jr flF Mainyoito Pastoralist Integrated Development Organization-MPIDO Pan-African Forest-Dependent Indigenous Peoples Forest Carbon Partnership Facility Capacity Building Program on REDD+ Project Audit report for the period 1st June 2016 to 31st December 2017 TABLE OF CONTENTS Particulars Page Project Information 1-4 Statement of Management Responsibilities 5 Report of the Independent Auditors 6-7 Fund Accountability Statement 8 Statement of Financial Position 9 Notes to the Financial Statements 10-12 Mainyoito Pastoralist Integrated Development Organization-MPIDO Pan-African Forest-Dependent Indigenous Peoples Forest Carbon Partnership Facility Capacity Building Program on REDD+ Project Audit report for the period Ist June 2016 to 31st December 2017 Board Members Mr. John K. Ole Kintalel Chairman Mr. Joseph Ole Simel Secretary/ Executive Director Mrs. Mary Parakuo Treasurer Mr. Nelson Koyiet : Member Mrs. Elizabeth Kiok Member Mr. Eliud Neiliang Member Mr. Prof. John Galaty Member Registered Office Mainyoito Pastoralist Integrated Development Organization, Marist International College Rd, off Lang'ata Rd, P.O.Box 226, Kiserian. Principle Bankers Standard Chartered Bank of Kenya Moi Avenue Branch P.0 Box 30003 - 00100 Nairobi, Kenya. Donor World Bank Project Auditors Matengo & Associates, CPA (K) Financial & Management Consultants Wood Avenue, Lenana Road Kilimani P.0 Box 67603 Nairobi, Kenya E-mail: info@matengo-associates.com 1 Mainyoito Pastoralist Integrated Development Organization-MPIDO Pan-African Forest-Dependent Indigenous Peoples Forest Carbon Partnership Facility Capacity Building Program on REDD+ Project Audit report for the period 7st June 2016 to 31st December 2017 The Forest Carbon Partnership Facility (FCPF) was launched in 2007 as a result of strong interest of developing countries in REDD, and a clear demand from both industrialized and developing country governments for a mechanism that would help forested countries reduce emissions from deforestation and forest degradation and conduct demonstration activities to show how REDD could be implemented. The Facility has since become a global partnership of governments, businesses, civil society and indigenous peoples (IPs), with its main focus being laying the ground for future REDD+ activities, and piloting performance-based payment systems. A series of regional dialogues between the FCPF and IP representatives that have taken place since the beginning of the FCPF resulted in a request to support forest- dependent IPs in building their capacity to engage in REDD+ activities at the national and regional levels. While capacity needs vary between countries and communities, a number of common priority areas have emerged. Based on an open call for proposals and an agreed set of criteria, six regional Recipient organizations were selected with each organization being responsible for selecting and supporting small capacity building projects within their regions and targeted communities. MPIDO was selected to implement the project in respect to the Pan-African Forest-Dependent Indigenous Peoples FCPF Capacity Building Program on Redd+ project for the African region. MPIDO is a registered Non- Governmental Organization with a mandate to address social, economic, cultural, and Human Rights of indigenous peoples. It envisions a just and equitable society that recognize, respect and upholds human rights and the fundamental freedom of indigenous peoples'. MPIDO operates and carries out its activities at the community, national, Regional and Global Levels. 2 The Project Development Objective (PDO) is to strengthen: * The knowledge of targeted forest dependent indigenous peoples of REDD+ Readiness at the national level and (Component 1: National Capacity Building and Awareness Raising) * knowledge exchange at the regional level. (Component 2: Regional Exchange and Sharing of Lessons Learned) * Due diligence on applications from Nigeria, Uganda, Ethiopia, Liberia, Sudan, Republic of Congo and Cameroon (2 proposals), activating the projects through implementation contracts signed with the selected national sub grantees. Funds amounting to 60% of the respective budgets were released to the sub grantees. * Supervision and implementation support missions to the national implementations in Ethiopia, Nigeria, Liberia, Cameroon (FFAC) and Uganda. Such were conducted with the participation of the respective national REDD+ Focal points with meetings secured where the representatives were available. Support mission for the implementation in Rep of Congo, Sudan and Cameroon (REPALEAC) will be implemented in 2018. * A successfully issued call for proposals for technical papers on specific national themes were issued in Ethiopia, Uganda, Nigeria, Cameroon and Rep of Congo. This yielded 4 of 5 desired national technical papers with no paper submitted from Ethiopia. The technical papers underwent multiple internal and peer review before publication. * Self-selection process was commenced and concluded in Republic of Congo resulting in the formation of a new national IP network and in Ethiopia resulting in the formation of 5 Forest management cooperatives to engage with the regional governments on IP participation in the REDD+ readiness process. 3 * Three regional workshops; a project inception workshop in Accra, Ghana Sept 2016, An Exchange workshop and Field Visit to Francophone countries in Douala, Cameroon in February 2017, and an SSKE in Addis Ababa Ethiopia in Oct 2017 * Two Global level events; A side event at the 16th session (24th Apr to 5th May 2017) of the United Nations Permanent Forum on Indigenous Issues (UNPFII) in New York, and a lesson learning and sharing seminar was organized at the World Bank Offices in Washington on the 20th March 2017 to provide a learning opportunity to the representatives of the regional recipients and World Bank staff on the project achievements and challenges. * A gender position paper on "the role of Traditional Knowledge in respect to indigenous women and climate change adaptation" was published and disseminated during the 22ndUNFCC Conference of Parties (COP) at Marrakech, Morocco. * POSITION PAPER on the role of Traditional Knowledge in respect to Indigenous Women and Climate Change Adaptation. * A regional project communication strategy was developed and improved through live implementation on the project activities * A Gender paper was developed and shared during UNFCCC COP 22 The objective of the audit is to express an opinion on whether the project financial reports are fairly stated and that the expenditure incurred is accurate and eligible. The audit intended to confirm whether the objectives of the projects were realized, by determining the following processes: Compliance to the contract requirements and that expenditure incurred is applied solely for the achievement of the project objectives. 4 Ascertain that the funds have been accounted for in accordance with the auditing standard 800- Auditors Report on Special Purpose Audit Engagements. Confirm that the funds have been accounted for in accordance with the generally accepted accounting principles. Ensure that the funds have been used in accordance with the application and letter of allocation. The Projects' income in the period consists of grants from World Bank to the best of our knowledge and based on the confirmation from management, no income related to the projects has been left out of the Fund Accountability Statements has the total income received was utilized for the Project Activities. The audit covers all financial aspects of the project for the period V June 2016 to 31 December 2017. We carried out our examinations on test basis of evidence relevant to the amounts and disclosures in the project financial statement and records as well as other project information. The audit confirmed the following during the audit: * All funds disbursed under the Project are eligible, have been used, accounted for and classified in accordance with the relevant Loan/Grant agreements and all the disbursements made on behalf of the project are in accordance with the World bank disbursement guidelines; * The PFS are prepared in accordance with the International Financial Reporting Standards, under the cash basis of accounting and give a true and fair view of the financial operations of the project within the year. Any material deviations from those standards and the impact of such departures on the project financial statements as presented would be stated; * An assessment of the effectiveness of the internal controls over financial reporting involved in the preparation of replenishments, direct payments, 5 payments through special commitments, and reimbursements i.e. expenditures reimbursed on the basis of Statements of Expenditures can be relied upon to support the related withdrawals; * Goods and services financed have been procured in accordance with World Bank Procurement Guidelines updated in May 2004 and October 2006; * All necessary copy of supporting documents, records, and accounts have been kept in respect of all projects. Clear linkages should exist between the books of account and the Project Financial Statements (PFS) presented to the Bank; * Where Special/Designated Accounts have been used, they have been maintained in accordance with the provisions of the relevant Loan/ Grant agreements; * Project expenditures as reported by the Governing Body are reconciled with the amounts withdrawn from the Special/ Designated Account and the amounts deposited to the Special/ Designated account are reconciled with the amounts disbursed from the Loan/ Grant agreements. * Eligibility of expenditures claimed under Statement of Expenditures submitted to the World Bank for replenishment. This is in addition to substantiation of these expenditures; * An assessment of project implementation and whether financial and physical progress is consistent during the project period. The monitoring of the expenditures in relation to physical progress is validating that physical progress and disbursements are under proper financial control * Ensure that the fixed assets financed by the project are purchased in accordance with contracts and payment documents, are used for the purpose for which they were acquired and are physically existent; 6 Mainyoito Pastoralist Integrated Development Organization-MPIDO Pan-African Forest-Dependent Indigenous Peoples Forest Carbon Partnership Facility Capacity Building Program on REDD+ Project Audit report for the period Ist June 2016 to 31st December 2017 Verify that checks are signed by those authorized by management and negotiated by the intended payee under a specific contract and as required under the terms of the Loan/Grant agreements; Based on our control and risk assessment, we selected and audited 100% of total expenditure in the Fund Accountability Statements for the financial period under audit. We did not perform any surprise cash count during the audit assignment as our appointment was after the project period. The funds received for the projects were banked in separate accounts as detailed in the grant agreement. Our checks did not reveal any unauthorized movements in the bank balances. No interest was charged on the funds. We checked that no interest was accrued in the period as regards bank balances. Consequently, no such interest income has been booked as income in the Fund Accountability Statements. During our audit, we did not become aware of any matters indicating or giving rise to suspicion of fraudulent actions materially affecting the Project Funds and any acts or omissions affecting the projects, its participants or employees, which would give reason to believe that members of the project management may be liable in damages or incur criminal liability. 7 Mainyoito Pastoralist Integrated Development Organization-MPIDO Pan-African Forest-Dependent Indgenous Peoples Forest Carbon Partnership Facility Capacity Building Program on REDD+ Project Audit report for the period June 2016 to 31st December 2017 We confirm that, except for the matters noted above: (i) We complied with generally accepted qualification and independence requirements for purposes of the audit; (ii) That we have received all information requested and considered necessary to perform the audit; (iii) That we consider the Financial Statements to be based on correct book-keeping and accounting practices. 8 Mainyoito Pastoralist Integrated Development Organization-MPIDO Pan-African Forest-Dependent Indigenous Peoples Forest Carbon Partnership Facility Capacity Building Program on REDD+ Project Audit report for the period 1st June 2016 to 31st December 2017 STATEMENT OF MANAGEMENT'S RESPONSIBILITIES The management has the responsibility to prepare Fund Accountability Statements which give a true and fair view of the state of affairs of the projects as at the end of the financial period. They are also required to ensure that the programme keeps proper accounting records which disclose, with reasonable accuracy, the financial position of the project. The management is also responsible for safeguarding the assets of the programme. The management certifies that to the best of their knowledge and belief, the information furnished to the auditors for the purpose of the audit was correct and complete in all respects, and in their opinion the statement gives a true and fair view of the state of the financial affairs of the programme. The management further accepts the general responsibility for the maintenance of accounting records, which may be relied upon in preparation of Fund Accountability Statements, as well as adequate systems of internal control. A pr ved b the manage d signed on its behalf by: Ex ctive Director Chai of the Bo 3rd of Directors Date: Ic //'Date: ....... . : ......................... 9 I..... . Lenana Road - Wood Avenue Junction Gate 51, Apartment B6 M AT6NGO G AScSO I,AT Sc P0 Box 67603 -00200 Nairobi, Kenya 'AA EN U' G SS CITE Tel: +254 20 2420016 Financial & Management Consultants Email: matengo@bidii.com info@matengo-associates.com Website: www.matengo-associates.co.ke REPORT OF THE INDEPENDENT AUDITORS We have audited the accompanying Fund Accountability Statement for the period ended 31, December 2017 set out on page 8, implemented by Mainyoito Pastoralist Integrated Development -MPIDO- in accordance with the accounting policies described on page 10. The statement has been prepared by management of Mairiyoito Pastoralist Integrated Development based on the provisions of the grant letters between Mainyoito Pastoralist Integrated Development and World Bank. Management's Responsibility for the Fund Accountability Statement Mainyoito Pastoralist IntegriJed Development Management is responsible for the preparation and fair presentation of these fund accountability statements in accordance with the accounting policies for cash receipts and payments described on page 10 and fcr such internal controls as management determines necessary to enable the preparation of the funri accountability statement that is free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an independent opinion on the fund accountability statemeni based on our audit. We conducted our audit in accordance with international Standards on Auditing. Our report is in accordance with the auditing standard ISA 800 Special Consideration-Audit of Financial Statements prepared in Accordance with Special Fra,il,work' . Those standards2 require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free iroi material misstatement,. An ;Rudit involves performing procedures to obtain audit evidence about the amounts and disclosures in The financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial (tatements. whether due to fraud or error. in mak.ng those risk assessments, the auditor considers the internal control relevant to the entity's preparation and fair presentation of the fund accountability siatements in order to design audit procedures that are appropriate in t.he circumstances, but not for the purpose of expressing an opinion on the effetiveness of entity's internal control. Ar audit also includes evaluating the approoriateness of acounting policies used and the reasonableness of accounting esLimates made by the management, as well as evaluating the overall presentation o. the fund accountabilfty -atement. PIN No. A001105256H Services: Auditing, Taxation, Training & General Consultancy VAT No. 0113047B We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. We noted the following: 1. The project sub-grants amounting to USD 154,427 was reported as outstanding as the financial audit for the sub grantees had not been carried out in line with the Article 11 of the Agreement, as the funds were disbursed in diverse dates which implies that the one-year period is not yet met. 2. The funds to SAWA Sudan was disbursed directly and had not been reported at the end of the period. Opinion Except for the above, in our opinion, the Fund Accountability Statement presents fairly in all material respects, the grant revenues and allowable expenses of the project activities for the period ended 31st December 2017. Basis of Accounting and Restriction on Distribution and Use Without modifying our opinion, we draw your attention to the significant accounting policies which describe the basis of accounting. It is common practice that the Fund Accountability Statement is prepared on the basis of cash receipts and payments. By using this practice, income will be included when received rather than when earned and expenditures will be included when paid rather than when incurred. As a result, the statement may not be suitable for another purpose. This report is solely intended for the information and use of Mainyoito Pastoralist Integrated Development and World Bank. MATENGO & ASSOCIATES CERTIFIED PUBLIC ACCOUNTANTS (K) -s c D ate: .............................. 2018 11 Mainyolto Pastoralist Integrated Development Organization-MPIDO Pan-African Forest-Dependent Indigenous Peoples Forest Carbon Partnership Facility Capacity Building Program on REDD+ Project Audit report for the period 1st June 2016 to 31st December 2077 Fund Accountability Statement for the period ended 31t December 2017 Budget Actual Variance Notes USD USD USD % Income Grant Income 2 774,583 618,084 156,499 Total 774,583 618,084 156,499 20 Less: Expenditure National Capacity Building and Awareness Raising 3 440,000 170,459 269,541 16 Support and empowerment of IP organizations 4 89,382 51,820 37,562 42 and networks Regional Exchange and Sharing of Lessons Learned 5 134,000 89,257 44,743 (22) Dissemination of knowledge products and lessons learned 6 13,255 3,176 10,079 - Management, M&E and Reporting 7 97,946 79,922 18,024 18 Total 774,583 394,634 379,949 19 Net Fund Balance for the period 223,450 e Fund ccountability tatement was approved Jabeollowing: E cutive Director C of the ard of Directors Date: ..... Date 12 - Mainyoito Pastoralist Integrated Development Organization-MPIDO Pan-African Forest-Dependent Indigenous Peoples Forest Carbon Partnership Facility Capacity Building Program on REDD+ Project Audit report for the period Ist June 2016 to 31st December 2017 Statement of Financial Position for the period ended 31 December 2017 2017 Assets Notes USD Receivables 8 154,427 Cash at Bank 9 76,523 Total Assets 230,950 Equity and Liability Equity Fund Balance 223,450 Total Equity 223,450 Liabilities Payables 7,500 Total Equity and Liabilities 230,950 Th St teme t of Financi I Posi ion was approved by the following: Ex c tive Director Chairm of the oard of Directors Date:. . ....... Date: . .. 13 Mainyoito Pastoralist Integrated Development Organization-MPIDO Pan-African Forest-Dependent Indigenous Peoples Forest Carbon Partnership Facility Capacity Building Program on REDD+ Project Audit report for the period 1st June 2016 to 31st December 2017 Notes to the Financial Statements 1. ACCOUNTING POLICIES The fund Accountability statements are prepared in accordance with Generally Accepted Accounting Principles adjusted to the provisions of the grant agreement and the principal accounting policies set out below. a) Basis of Accounting The fund accountability statement has been prepared on a cash basis of accounting which recognizes revenue when cash is received and expenses when cash is paid. b) Revenue Recognition Income represents grants received during the period. Grants from donors are accounted for when received. c) Funding The total grant received from the donor by Mainyoito Pastoralist Integrated Development during the period was USD 618,084 and disbursed as follows: Particulars Date Amount (USD) Donor Grant 05.08.2016 300,000 Donor Grant 13.02.2017 78,458 Donor Grant 22.09.2017 91,626 Donor Grant 22.08.2017 38,527 Donor Grant 27.11.2017 79,512 Donor Grant 29,961 Total 618,084 d) Currency The Fund Accountability Statement has been presented in USD. The fund was spent in both USD and Kenya Shillings. For Kenya Shillings, a spot rate has been used for translation. 14 Mainyoito Pastoralist Integrated Development Organization-MPIDO Pan-African Forest-Dependent Indigenous Peoples Forest Carbon Partnershil Facility Capacity Building Program on REDD+ Project Audit report for the period 1st June 2076 to 31st December 2017 Notes to the Financial Statements Budget Actual Variance USD USD USD % 2 Incomes Grant Income 774,583 618,084 156,499 20 Total 774,583 618,084 156,499 20 3 National Capacity Building and Awareness Raising Implementation of capacity building and awareness raising activities Sub-grants 400,000 151,055 248,945 62 Review existing learning materials and Development of new materials (case studies, reports, learning materials) 25,000 8,170 16,830 67 Baseline survey - - - TAC expenses (Hosting and honorarium) 15,000 11,234 3,766 25 Total 440,000 170,459 269,541 15.5 4 Support and empowerment of IP organizations and networks French liaison 19,200 2,400 16,800 88 Gender specialist 14,400 10,837 3,563 25 Communication and knowledge Management Officer 28,800 22,358 6,442 22 Supervision of sub-grants through field trips and grievance redress Mechanism 26,982 16,225 10,757 40 Total 89,382 51,820 37,562 42 5 Regional Exchange and Sharing of Lessons Learned Regional Inception workshop 60,000 60,151 (151) - 0.00 South-South Exchanges 24,000 29,106 (5,106) (21) Regional Completion Workshop 50,000 - 50,000 100 Total 134,000 89,257 44,743 78 15 Mainyoito Pastoralist Integrated Development Organization-MPIDO Pan-African Forest-Dependent Indigenous Peoples Forest Carbon Partnership Facility Capacity Building Program on REDD+ Project Audit report for the period Ist June 2016 to 31st December 2017 Notes to the Financial Statements Budget Actual Variance USD USD USD _ Dissemination of knowledge products and lessons 6 learned Dissemination of new and existing products 5,255 - 5,255 100. Non-electronic communication 8,000 3,176 4,824 60 Total 13,255 3,176 10,079 76 7 Management, M&E and Reporting Project Coordinator 100% 33,600 25,797 7,803 23 FM Officer 60% 16,800 13,033 3,767 22 Executive Director 40% 16,800 13,022 3,778 22 Procurement Officer (50%) 12,600 13,023 (423) - (3) External auditor 7,746 7,500 246 - Office materials and supplies 2,000 311 1,689 84 Office space and telephone 6,000 5,565 435 7 Vehicle expenses, including fuel 2,400 1,672 728 30 Total 97,946 79,922 18,024 18 16 Mainyoito Pastoralist Integrated Development Organization-MPIDO Pan-African Forest-Dependent Indgenous Peoples Forest Carbon Partnership Facility Capacity Building Program on REDD+ Project Audit report for the period 1st June 2016 to 31st December 2017 Amount Amount Disbursed Accounted Unaccount for ed for 8 Receivables US Dollars US Dollars US Dollars Wise Administration of Terrestrial Environment and Resources 44,384 28,103 16,281 Pro-Biodiversity Conservationists in Uganda 46,170 28,749 17,421 Initiative for Living Community Action 47,500 47,419 81 Forum Des Femmes Autochthones du Cameroun 47,467 24,059 23,408 Association Debout Femme Autochthones du Congo 30,000 - 30,000 Community Development Initiative-LIBERIA 30,000 22,725 7,275 The Network of Indigenous Peoples and Local Ii Populations for the Sustainable Management of the Forest Ecosystems in Central Africa 30,000 30,000 Sawa Sudan for Development 29,961 29,961 I Total 305,482 151,055 154,427 9 Cash and Cash Equivalent USD Standard Chartered Bank (USD) 74,124 Standard Chartered Bank (KES) Accounts) 2,259 Cash at Hand 137 Total 76,520 17