I I MINISTRY OF LOCAL GOVERNMENT & RURAL I DEVELOPMENT(MLGRD) I I I GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) I JAPAN SOCIAL DEVELOPMENT FUND (JSDF) GRANT NO. 017344 I I INANCIAL STATEM I OR THE YEAR ENDED 31 81 DECEMBER 2 I I I I GHANA AUDIT SERVICE I I I I DECEMBER 2018 I I MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) E GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) JAPAN SOCIAL DEVELOPMENT FUND (JSDF) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 8T DECEM:BER2018 I TABLE OF CONTENTS I I CORPORATE INFORMATION ..................................................................................... 1 I INDEPENDENT AUDITORS REPORT ON THE FINANCIAL STATEMENT ........... 2 STATEMENT OF SOURCES AND USES OF FUNDS .................................................. 4 I PROJECT COST SUMMARY (BY CATEGORY) .......................................................... 5 I ANALYSIS OF EXPENDITURE BY PROJECT ACTIVITY .......................................... 6 I STATEMENT OF FINANCIAL POSITION ................................................................... -8 NOTES TO THE FINANCIAL STATEMENTS ............................................................. 8 I I I I I I I I I I I MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) I GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) JAPAN SOCIAL DEVELOPMENT FUND (JSDF) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 5rDECEl\1BER2018 [ CORPORATE INFORMATION I National Coordination Robert E. Austin - National Coordinator I Office: Henry A. Bosompem - Financial Controller [ George Kwadwo Osei Ababio - Chief Infrastructure Engineer Desmond Duametu - National Capacity Building I Registered Office: Ghana Social Opportunities Project Specialist I National Coordination Office Ministry of Local Government & Rural Development Postal Address: P. 0. Box CT 3742 I ' Cantonments -Accra Bankers: GCB Bank Limited I High Street Branch P. 0. Box 2971 Accra I I I I I I I I I Page I I I I Goo,l Governance an,/ .,;Jccou11t:abi/i1_,-, I INDEPENDENT AUDITORS REPORT ON THE FINANCIAL STATEMENTS I TO THE MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLRGD) I Report on the Financial Statements We have audited the accompanying financial statements of Ghana Social Opportunities Project (GSOP) - Japan Social Development Fund (JSDF) for the year ended 3pt December 2018 as set I out on pages 4 to 12. These financial statements comprise the Statement of Financial Position as at 31st December 2018, Statement of Sources and Uses of Funds, the Project Cost Summary and I summary of significant Accounting Policies and other explanatory notes. Project Management's responsibility for the financial statements I The National Coordinating Office (NCO) of GSOP under the Ministry of Local Government & Rural Development (MLRGD) is responsible for the preparation and fair presentation of these financial statements in accordance with World Bank financial reporting guidelines. This I responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies; and I making accounting estimates that are reasonable in the circumstances. Auditors' responsibility I Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. I Those standards require that we comply with ethical requirements and plan and perform our audit to obtain reasonable assurance whether the financial statements are free from material misstatement. I An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' I judgement, including the assessment of the risks of material misstatements, whether due to fraud or error. I I I [ Page 2 r I I I In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the I effectiveness of the project's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I We believe that the audit evidence we have obtained is sufficient and appropriate to provide the basis for our audit opinion. I Opinion In our opinion, proper books of account have been kept and the accompanying financial I statements, which are in agreement therewith, give a true and fair view of the state of the Project's Financial Affairs as at 31st December 2018 and of its Cost Summary, Sources and Uses of Funds for the year then ended in accordance with World Bank financial reporting guidelines I and are in compliance with Grant Number TFOI 7344 and accounting policies. I I Signature: ...... ~ 4 : ' . 1 / . ~ ~ · · · · · · · · · · · · · · · · · · · · · · · · · · · · I BLESSED BAFFOUR-ATTA DEPUTY AUDITOR-GENERAL/EIDA I Date 3"R1? ,E,\h'( ,),Jv \ er I I I I I I I Page 3 I MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) I GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) JAPAN SOCIAL DEVELOPMENT FUND (JSDF) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 sT DECEMBER 2018 I STATEMENT OF SOURCES AND USES OF FUNDS I FOR THE YEAR ENDED 31 sT DECEMBER 2018 I 2018 JSDF 2018 JSDF 2017 JSDF Current Cumulative Cumulati I Project Life ve Project Life I US$ US$ US$ SOURCES I Funds received during the year - JSDF Grant No. 017344 606,333 2,510,394 1,904,061 I Unspent Funds Returned (119,459) (119,459) (119,459) 486,874 2,390,935 1,904,061 I USES Component I Business Management Support and Support to Community 1 604,441 1,966,617 1,362,175 Interest Groups. I Project Management and Administration, Monitoring and 2 170,849 424,291 253,442 I Evaluation. Total Expenditure 775,290 2,390,908 1,615,618 I Balance of Project Funds (288,416) 27 288,443 I I I I I Page 4 I MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) I GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) JAPAN SOCIAL DEVELOPMENT FUND (JSDF) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 5T DECEMBER 2018 I PROJECT COST SUMMARY (BY CATEGORY) FOR THE YEAR ENDED 31 sT DECEMBER 2018 I 2018 2018 2017 I Current Expenditure Cumulc1tive Exp~nditure Cumulative Expenditure US$ US$ US$ I Category Consultants 136,111 329,772 193,661 I Sub - Projects 449,959 1,574,063 1,124,103 I Training Operating Costs 154,482 34,737 392,554 94,519 238,072 59,782 I Total 775,290 2,390,908 1,615,618 I I I I I I I I I I Page 5 ·------------------- ,;1/.l/1'/8/l/..lr/iflll:,A'/l/#lr;/f/1'/H,,:.tl'/:1'/.A",1/l/l,~/.,Jl/l'/,/l/l/8/l/l/#/L/l/l/l,/I/K/P"/I/I/I/I/AY/l/l/.l/6/l/l::#/l/..lr/l/.l/l/l/K/l/l/#/l/l,W/~,/H/K/~~~#/I/I/I/I/IW~/~l/l~,1/~l/l/l/l/~~~~~l/~~6/l/l/~l/#/l/l/l/l/l/l/~I/I/I/I/I/I/H/l/l/l/~~l/~#/,4 MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT {MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) JAPAN SOCIAL DEVELOPMENT FuND (JSDF) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 8T DECEMBER2018 '#lr,l/l/#/,l/f/#A'/#l/1'/G,#.IF"/,A:,N/;,r..,d/,J/fll'/I/N~:.&',:tft'/;J.¥/,l/!"/G/l/:N:-K/l/,IY,,4'/,r;,:.t!J!):,,/1/l/l/l'H/l/dr/l)#/A'/l/:,JT,,W,,l/,lf;,l-:G'/.#/J/lfhl/l/H/l/,i/l'/,llf)ifr/Jil,-'H/~~~l,l/~~l/l/~~l/l/l~~l/~~l/~l/d/~#,r,,A/H/J'f;,Afl'/I/I/J!!"/I/.H,Jl!'X~H/,tl!Y/#,,H/A:#/A'/#/I/A'F/.8.Y/l•l/l/,i#/J/f{'/#/U/F/:Jfl'/I/Jil/:#/#A ANALYSIS OF EXPENDITURE BY PROJECT ACTIVITY (CUMMULATIVE) FOR THE YEAR ENDED 31 ST DECEMBER 2018 2018 2017 Consultants Training Sub- Operating Cum.mutative Cummulative Projects Costs Expenditure Expenditure Component 1: US$ US$ US$ US$ US$ US$ Business Management Support and Capacity Building for 392,554 1,574,063 1,966,617 1,362,175 Income Generation Activities Component 2: Project Management and Administration, 329,772 94,519 424,291 253,443 Monitoring/Evaluation and Knowledge Dissemination Total 329,772 392,554 1,574,063 94,519 2,390,908 1,615,618 Page 6 I MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) I GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) JAPAN SOCIAL DEVELOPMENT FUND (JSDF) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 5TDECEMBER2018 I STATEMENT OF FINANCIAL POSITION I AS AT 31ST DECEMBER, 2018 2018 2017 I Investment Notes 3 USD 1,966,617 USD 1,362,175 I Recurrent Project Expenditure Fixed Assets 4 5 390,750 33,541 219,901 33,541 2,390,908 1,615,618 I Current Assets I Cash and Bank Balance Net Assets 6 27 27 288,443 288,443 I Current Liabilities I Net Current Assets 2,390,935 1,904,061 I Represented By: I Japanese Social Development Fund (JSDF) Grant No.017344 2,390,935 1,904,061 2,390,935 1,904,061 I The financial statements on Pages 4 to 12 were approved on behalf of the Project Management I on ...................................................................... 2018 and sig1'.~ I ...., ..:"N~ti~~~1·c~~~~fr~~ii~~·············--·-·-·-·· I . GSOP Financial Controller GSOP I . I Page 7 I MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) I GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) JAPAN SOCIAL DEVELOPMENT FUND (JSDF) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 sT DECEMBER 2018 I NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 5TDECEMBER2018 I 1. Japan Social Development Fund I a) Financing Agreement I This is a grant provided by Japan under the Japan Social Development Fund. The Grant Agreement Number TFOl 7344 was signed between the Government of Ghana and the International Development Association (IDA) of the World Bank I on 18th August 2014 for a grant not to exceed two million, seven hundred and fifty two thousand, five hundred United States Dollars (US$2,752,500.00) to support income generation activities of the extreme poor households located in eight (8) I pilot districts of Upper East Region where the Ghana Social Opportunities Project GSOP) operates. I b) Project Description The objective of the project is to improve incomes of the extreme poor households I by enabling them to manage their small farm and non-farm activities more productively and sustainably. I The Project consists of the following components: Component One: Business Management Support and Support to Community I Interest Groups for their Income Generation Activities. Component One would provide support through; I (i) Carrying out awareness promotion activities for income generation opportunities. I (ii) Providing necessary training for business management and business advisory services to the Community Interest Groups. I (iii) Providing follow-up business advisory services to Community Interest Groups. I (iv) Providing sub-grants to Community Interest Groups and selected beneficiaries for carrying out sub-projects. I I I Page 8 I MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) I GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) JAPAN SOCIAL DEVELOPMENT FUND (JSDF) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 sT DECEMBER 2018 I Component Two: Project Management and Administration, Monitoring and Evaluation, and Knowledge Dissemination I This component involves; I a) Project management and Administration which includes; (i) Financial Management I (ii) (iii) Procurement Auditing (iv) Participatory strategic planning for sustainability and I (v) mainstreaming Environmental assessment I (vi) Administrative costs including coordination with the implementing partners I b) Carrying out monitoring and evaluation and knowledge dissemination activities to cover project monitoring and reporting and conducting an impact evaluation of the project. I c) End of Project I In accordance with the Grant Document the project implementation shall start on March 15, 2014 and end on August 18, 2018. In accordance with the Disbursement Letter, the Disbursement Deadline Date is four (4) months after the I closing date specified in the Financing Agreement, hence there were further eligible disbursements till December 18, 2018. After this date, undocumented balance in the Designated Account ofUSDI19,458.82 was transferred to the IDA I on 21st December, 2018. 2. Accounting Policies I The following are the significant accounting policies adopted in the preparation of these financial statements. I a) Basis of Preparation I (i) Statement of Compliance The financial statements have been prepared in accordance with I International Financial Reporting Standard (IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB). I (ii) Basis of Measurement I Page 9 I MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) I GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) JAPAN SOCIAL DEVELOPMENT FUND (JSDF) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 8TDECE:MBER2018 I The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment property, financial I assets and financial liabilities at fair value. I (iii) Use of Estimate and Judgement The preparation of financial statements in conformity with IFRS requires I management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based I on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that I are not readily apparent from other sources. Actual results may differ from these estimates. I The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects both current and future I periods. b) Presentation of Financial Statements I (i) Functional and Presentation Currencies I The financial statements are presented in United States Dollars (US$) which is the reporting currency for the financial statements. I (ii) Transactions and Balances Transactions in foreign currencies are converted at the rate ruling on the I day the transaction took place. Current assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date and property, plant and equipment translated at the rate of I exchange ruling at the time of acquisition. Gains and losses arising on foreign currency transactions are credited to or charged against recurrent expenditure in the period in which they arise. I c) Property, Plant and Equipment I (i) Recognition and Measurement Property, plant and equipment represents the expenditure incurred mainly I in acquiring office equipment and motor vehicles for use by the National and Regional Coordinating Office, Bolgatanga. I Page 10 I MINISTRY OF LOCAL GOVERNMENT AND R~JRAL DEVELOPMENT (MLGRD) I GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) JAPAN SOCIAL DEVELOPMENT FUND (JSDF) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 sT DECEMBER 2018 I This is measured at the actual contracted cost of purchase. Cost includes expenditures that are directly attributable to bringing the asset to the I location and working condition necessary for it to be capable of operating in the manner intended by management. I (ii) Subsequent Costs I Subsequent costs are included in the asset's carrying amount or recognized as a ·separate asset, as appropriate, when it is probable that the future economic benefits associated with the item will flow to the Project and the I (iii) cost of the item can be measured reliably. Depreciation I No depreciation is charged in the financial statements. d) Investment I The expenditure incurred in providing business support to community interest groups other than recurrent expenditure is capitalized as investment. This I comprises expenditure incurred on Promoting Awareness of Income Generation Opportunities and Skills Training. I e) Recurrent Project Expenditure The administrative expenditure incurred by the National Coordinating Office in I Accra and the Regional Coordinating Office, Bolgatanga are classified as recurrent project expenditure. Recurrent project expenditure comprises salaries and wages of project staff, occupancy cost, motor vehicle running and maintenance expenses, I post and telecommunications, utilities, printing and stationery expenses. f) Income I Income is recognized on cash basis and credited directly to the respective donors account. I Balance as at Balance as at I Notes 31/12/2018 USD 31/12/2017 USD 3 INVESTMENTS I Promoting Awareness of Income Generation Opportunities 47,699 47,699 I Business Management Training Grants for Households 344,855 1,574,063 190,373 1,124,103 E Page 11 I MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) I GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) JAPAN SOCIAL DEVELOPMENT FUND (JSDF) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 sT DECEMBER 2018 I TOTAL 1,966,617 1,362,175 I 4 RECURRENT PROJECT EXPENDITURE Staff Salary 205,158 113,098 I Utilities Office Consumables/Stationery 5,730 7,151 3,599 5,502 I Contract Photocopying Travel Allowance and Fuel 876 29,002 876 25,810 Maintenance of Official Vehicle 31,431 11,238 I Maintenance of Equipment, Furniture 6,275 6,071 M&E Field Survey 91,073 39,904 I Financial Charges 14,054 13,804 I TOTAL 390,750 219,901 5 FIXED ASSETS I Motor Vehicle 27,746 27,746 Computer and Equipment 4,248 4,248 I Furniture and Fittings TOTAL 1,547 33,541 1,547 33,541 I CURRENT ASSETS BOG JSDF Grant Designated Account - I 6 USO GCB JSDF Bank Account - Accra 0 27 10,359 156 I GCB Bolga JSDF Bank Account TOTAL 27 10,178 337 I I I I I .............................. 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