AUDIT OF FINANCIAL STATEMENTS FOR THE REVITALISING EDUCATION DEVELOPMENT IN SIRRA LEONE (REDISL) PROJECT FOR THE YEAR ENDED 31" DECEMBER 2016 Revit'//sing Eduation Revepalsment in Sierra Leone (REliSl]Project MinIStryfflducaton, Science and Technology SIiN LON1 finef/flStamenS for the year ended St Oecaher2,/1F Contents Page General Information Statement of Management's Responsibilities 2 Report of the Auditors 3-5 Background to the Project 6 Statement of Resources and Expenditure 7 Statement of Comprehensive Income 8 Statement of Financial Position 9 Statement of Cash Flows 10 Notes to the Financial Statements 11 -13 Report of the Auditors on the Special Auditor 14 Special Account Statement 15 Rorita/isig dwAtifo leVeuoPment in Sierra Lion ffEl0flroject A '12i Mlnistry of Education Scince and Technology SIR & LMFinancial Statements for the year ended 3f December 2015 GENERAL INFORMATION Official Address Revitalizing Education Development in Sierra Leone (REDiSL) Project New England Ville, Brookfield's Freetown Project Coordinator Mr. Reginald C. King Bankers Sierra Leone Commercial Bank Siaka Steven Street, Freetown Auditors Audit Service Sierra Leone 2nd Floor, Lotto Building Tower Hill Freetown Sierra Leone 1 ffevtgisngfducaionD evelopment/i SierOora LOeE ifSL) Prect Mfisry of Educahton Science ad Tech/olegy STATEMENT OF MANAGEMENT'S RESPONSIBILITIES It is the responsibility of management to prepare Financial Statements for each financial year which should show a true and fair view of the state of affairs of the Project and of its surplus or deficit for that year. In preparing these Financial Statements the Management is required to: * select suitable accounting policies and apply them consistently; * make judgments and estimates that are reasonable and prudent; * state whether applicable accounting policies have been followed, subject to any material departures disclosed and explained in the Financial Statement; * prepare the Financial Statements on a going concern basis unless it is inappropriate to presume that the Project will continue its activities Management is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Project. They have a general responsibility for such steps as are reasonably available to them to safeguard the assets of the Project and to prevent and detect fraud and other irregularities. On behalf of Management Permane Secretary - Ministry of Education, Science and Technology Project Coordinator 2 Revitalising EducMIoN flEvel7pme1t in SirM Leone (REliSL Project Mistry olfducain, Science ad Tchnoflogy SIPLA LEO Financal sttements for the year ended 7P ,Ormber 2IS Audit of the Revitalising Education Development in Sierra Leone performed by the Auditor General Addressee: The Project Coordinator Date: Dear Sir Unqualified Opinion I have audited the financial statements of the Revitalizing Education Development in Sierra Leone for the period Pt January to 31". December 2018. These financial statements comprise a statement of esounex and expenditure, statement of omprehensive income, statement offinancial position and 6ash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information as set out on pages 6 to 16. In my opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Revitalizing Education Development in Sierra Leone as at 31"¾ December 2018 and of its financial performance and its cash flows for the year then ended in accordance with the accounting policies as stated in note 1 of the financial statements and the IDA Guidelines. Responsibilities ofManagement and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Those charged with governance are responsible of overseeing the entity's financial reporting process. Auditor's Responsibility for the Audit of the Financial Statements My 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 my opinion, Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards for Supreme Audit Institutions 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. 3 L UP'1Revitd/ising Education Iselpment n Sierre leone (R'EliSL) Project AifistryfEdicitioa Science and Technology IBRA LN fInecisatements for the yrendeds3locemberas As part of an audit in accordance with International Standards for Supreme Audit Institutions, I exercise 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 controls, * 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 Entity's internal control. * Evaluate the appropriateness of accounting policies uses and the reasonableness of accounting estimates 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 Entity's ability to continue as a going conce3rn. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor's report to the related disclosures in the financial statements or, if su8ch disclosures are inadequate, to modify my opinion. My 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 Entity 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 achieves fair presentation. I 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 I identify during my audit. I also provide those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence, and to cominunicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. 4 Re vitalising Education levelopment iPSrra leone /RIEOiSf) Project ifinistryofEduutimo Science and Technology I X L IoNE FinancialStatements for the year ended 3' December 2018 From the matters communicated with those charged with governance, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor's report unless law or regulation precludes public disclosure about the matter or, when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication, kAUDITOR GENERAL Date:5 A5 R1UY'TReitelsing ducAion DOLkpmnt I Sierra Lfoe (REIS) Project Mmistry of Edation Science and Tech#ology IOU LA[ Apancial Statemuflts fr the year znded 3r gacemApi- li8 BACKGROUND TO THE PROJECT The Revitalising Education Development Project in Sierra Leone (REDiSL) was initially jointly funded through the provision of grants processed under the Investment Project Fund (IPF) Instrument available to the Government of Sierra Leone from both the Global Partnership for Education (GPE) Fund, and the Sierra Leone Multi-Donor Trust Fund (MDTF), contributed to by the Department for International Development (DFID). However, the funding support was closed on 3l1" December 2017 with a few components activities still to be concluded. Additional Financing (AF) provision for these remaining activities was made by the International Development Association (IDA)/World Bank in the form of a Credit in the sum of USD10 Million. The objective of the project is to improve the learning environment in target schools and establish systems for monitoring educational interventions and outcomes. - The Additional Financing (AF) now supports the scale up/continuation of the following sub- components: Part 1. Performance Based School Grants Part 2. Improvement in Teacher Management Part 3. Establish robust consistent school data collection and Analysis. Part 4. Project Management and Supervision 6 MorElRev/ta//ingr duonk Oeve/opment/in Sierro Leone (REix) Pro]ect EMistry of Educatni Science and Technology Ihi.e UK Floid Statements for the year ended 3f' Iecember 2l/B STATEMENT OF RESOURCES AND EXPENDITURE 2018 Notes US 5 Opening Bank Balance: IDA Special Account - Resources: Receipts into IDA Special Account 3 4,240,824 Bank interest . 4,240,824 Expenditures: Improving Learning Environment 728,999 Improving Learning Environment - School Grants 1,887,540 Strengthening education service delivery 322,936 Project Management and Monitoring 279,948 3,219,423 Closing Balance 1,021,401 Represented by: IDA Special Account 4 1,021,401 1,021,401 These Financial Statements were approved on.... ........ ... ............................ 2019 ..........r ...n........Permanent Secretary - Ministry of Education, Science and Technology ........... . ......... Project Coordinator 7 revitalisnEtnevelpnt ienene (REiS)]Project AIiniStryo0ffEduction7 SCienc 8,nd TechfilOgfy | LAKE 4[ Financi/ Statements for the year ended Y' liecember 21 STATEMENT OF COMPREHENSIVE INCOME Notes 2018 u S$ Income Funding from Donors 3 3,219,423 3,219,423 Expenditure - Project Expenditure 3,219,423 3,219,423 Results for the period - These Financial Statements were approved o...........................2019 .......... ..............Permanent Secretary - Ministry of Education, Science and Technology .... ..... ...........Project Coordinator 8 Revitaising fducaton ielopment in Sierra leone fREDisz) Project MinisIry offEducaio, ScIERce and Technology I[M LN T[ finencil Statements for the year ended 3f' December 20/8 STATEMENT OF FINANCIAL POSITION Notes 2018 us" Asset Cash and cash equivalents 4 1,021,401 1,021,401 Funding and Liabilities Deferred income 2 1,021,401 1,021,401 These Financial Statements were approved on..... .7.0 ....20.4 .. ............................2019 .....................'. .......................Permanent Secretary - Ministry of Education, Science and Technology ............... . ..................Project Coordinator 9 ~3.JP'TRevit alsing E ducation Isrec/opment i &irrs Leons (REBtYL) Project ' IiSZrV Of EdOUcaiR SCIenCe ArUd Terhno7lgy I1R~ LoNE Financia/ Statements for the year ended 3f flecember 218 STATEMENT OF CASH FLOWS Notes 2018 us $ Operating activities Cash paid to suppliers and employees 4 (3,219,423) Cash flows from operating activities (3,219,423) Financing activities Funding received 2 4,240,824 Cash flows from financing activities 4,240,824 Net increase in cash and cash equivalent 1,021,401 Cash and Cash equivalent at the start of the year Cash and cash equivalent at the end of the year 3 1,021,401 10 RUPT Fhituising0ducat,in leVulopmmnt in Sierre Leone t#EliSL) Proeat Af=/stryEfducatio Science and Technology SIIIlA dI fiancialStatements for the year ended Sf Iecember 2g/ NOTES TO THE FINANCIAL STATEMENTS 1. PRINCIPAL ACCOUNTING POLICIES The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Project's financial statement. a. Basis of accounting Statement of resources and expenditure are prepared on the basis of cash accounting whereby income is recognised on the receipt of cash and cash equivalents is recognised on the disbursement of cash and cash equivalents. The project financial statements have been prepared using the modified cash basis in line with the project financial reporting terms of reference. The basis of the income recognition is described in note (d) below. b. Foreign currency transaction Functional and presentation currency The functional currency is the local currency in Sierra Leone which is the Leone. The Project has however adopted the United States Dollars (US$) as its presentation currency as most of it transactions are dominated in US Dollars. Transactions in all other currencies are therefore considered foreign currency transactions. 11 Revit/ishg EducatileBevekymenit i Sierra Leone (REfS Project 1iIstryofducatioA ScIWce ad Techn/oy k BRFi&a1r1/1atemenus for the year ended 3r' Iecember 2/S NOTES TO THE FINANCIAL STATEMENTS (Continued) Transactions and balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing on the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions denominated in foreign currencies are recognized in the Project's Statement of Comprehensive Income. c. Non-current assets Plant and equipment are expensed on acquisition by the Co-ordinating Unit. The financial statements therefore have no non-current assets shown. d. Income Funding from the World Bank is held in a deferred income account when received and only recognised in the Project's Statement of Comprehensive Income when utilised. 12 I ReVitalng ducOAnM Isreopme7t in Sierraleone JB ElifL) Proect Inistry Of Educadi Science ad Technology Sh LAE FAncia/Statements ,fr the year ended3 scember 20/l NOTES TO THE FINANCIAL STATEMENTS 2018 2 Deferred income us1$ Payment into IDA Special Account 4,240,824 Utilised during the year (3,219,423) 1,021,401 Represented by: Cash and cash equivalents 1,021,401 3 Cash and Cash Equivalent IDA Special Account 1,021,401 4 Amount utilised during the year/cash paid to suppliers Component 1. IA - School grants 1,887,540 Component 1 I B - 1.3 Improving Learning Environment 728,999 Component 2.2 - Strengthening Systems 322.936 Component 3 - Project Management and Monitoring 279,948 3,219,423 13 ReVtolising Education levelopmntkiN Serra leone (REli80 Project - MinitryOfEducati7 Science and TechJ7i0logy Iwo f.1Roacid Statements for the year ended J deember Jl REPORT OF THE AUDITORS ON THE SPECIAL ACCOUNT STATEMENT, US DOLLAR ACCOUNT NUMBERED 003001006217412113 1 have audited the accompanying Special Account numbered 003001006217412113 with the Sierra Leone Commercial Bank established under the provision of the International Development Association (IDA) acting as administrator of the Global Partnership for Education Fund (GPEF) Loan Number: 6107-SL for the year ended 31s December 2018 as set out on page 15. I conducted the audit in accordance with the Standards of the International Organization of Supreme Audit Institutions (INTOSAI) and International Federation of Accountants (IFAC). Those Standards require that I plan and perform the audit to obtain reasonable assurance that the Special Account statements are free of material misstatement. The accompanying Special Account Statement was prepared on the basis of cash deposited and withdrawals for the purpose of complying with the project agreement. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Opinion In my opinion the receipts are properly accounted for and the withdrawals were made for the purpose of the project in accordance with the Loan agreement and IDA disbursement procedures. The accompanying special account statement gives a true and fair view of the ending balance for the year ended 31 ". December 2018. In accordance with the provisions of the terms of reference of the audit, I confirm as follows: * Withdrawals from the Special Account during the period under review were made for eligible expenditure. * The Special Account of the project has been maintained in accordance with the provisions of the financing agreement; AUDITOR GENERAL Da te 1 14 5 Revitaising EducatienDe velopment in S/errs Leone (RElfl) Project 91inist-rY ofdlscience aod Tchfkfy L 8u UK E5fi1781N81iA/Me9ens for the yreeddJBembr2/ - SPECIAL ACCOUNT STATEMENT Account No: 003001006217412113 Depository Bank Sierra Leone Commercial Bank Address: Siaka Stevens, Freetown Sierra Leone Related Loan Agreement: Loan Number: 6107-SL Currency: United States Dollars Part A- Account Activity 2018 Initial Deposit 4,240,824 Project Payments (3,2 19,423) 1,021,401 15