Project Fiduciary Tel: (+232-76-672-186) Management Unit Ministry of Finance Email: pfnu2018@gnail.com (PFMU) 13 Howe Street Freetown Sierra Leone GOVERNMENT OF SIERRA LEONE Ref: FMU/5008/mss/aiw 27th June 2019 The Financial Management Specialist World Bank Sierra Leone Country Office Spur Road Freetown Dear Sir, AUDIT OF THE FINANCIAL STATEMENTS OF THE STRENTHENING COMMUNITY MOBILIZATION AND LC SERVICE DELIVERY IN POST-EBOLA (JSDF FUNDED) PROJECT FOR THE YEAR ENDED 31 " DECEMBER 2018 The audit for the above financial statement for the year ended 31st December 2018 has been completed. The audited report have been approved and signed by the Technical Steering Committee, management of the project and the Auditor Audit Service Sierra Leone. Please find enclosed copies of the signed Financial Statements and Management Letter for your records. You ithfully, Mohamed S 'heriff Ag. Team Lead-PFMU Cc: File AUDIT OF FINANCIAL STATEMENTS FOR THE JAPAN SOCIAL DEVELOPMENT FUND (JSDF) FOR THE YEAR ENDED 31sT DECEMBER 2016 Jacpao Socialvelsuopmnt Fund(JS0F) C>Financib/Statments for coded 3f' December 2018 SSIBh IAK Contents Page General Information 1 Report of the Auditors 2-4 The Background to the Project 5 Statement of Management's Responsibilities 6 Statement of Resources and Expenditure 7-8 Statement of Comprehensive Income 9-10a Statement of Financial Position 10 Statement of Cash Flows 11 Notes to the Financial Statements 12- 13 Report of the Auditors on the Special Account Statement 14 Special Account Statement 15 Fixed Asset Listing 16 Japa SociB eelofment h11dfJIS0) F7dial Statements fOr year ended ? Recember 29118 GENERAL INFORMATION Official Address Project Fiduciary Management Unit (PFMU) 13A Howe Street Freetown Team Lead Mr. Alpha I Sesay Bankers Bank of Sierra Leone Auditors Audit Service Sierra Leone 2nd Floor, Lotto Building Tower Hill Freetown Sierra Leone Japan Sfcd0eveopment FndfSIF) fninsCAStatements for year ended Y' lcember 20/ SIM ILOM Audit of the Strengthening Conmunity Mobilization and LC Service Delivery in Post-Ebola (JSDF) performed by the Auditor General of the Republic of Sierra Leone Addressee Team Lead Date DearSir Unqualified Opinion I have audited the financial statements of Strengthening Community Mobilization and IC Service Delivery in Post-LbolaUSDF) for the year ended31' Deembe; 2018. These financial statements comprise a statement of financial position, tatement of comprehensie income, xale j/ow _atement jor the year then ended, and a summary of significant accounting policies and other explanatory information as set out on pages 8 to 20 In my opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Strengthening Community Mobilization and LC Service Delivery in Post-EbolaJSDFas at 31 December, 2018, and (of) its financial performance and its cash flows for the year then ended Responsibilities ofManagenent and Those Charged with Governance for the Financial Statements Management is responsiblc for the preparation and fair presentation of these financial statements arid 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 for overseeing the entity's inancial 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 s taLTemenT . As part of an audit in accordance with International Standards for Supreme Audit Institutions, I exercise - professional scepticism throughout the audit I also: 2 Japan SOckflevelopment fud(JSIF) FnaRCia/Statements for year ended 7) December 21/8 SER LdiM * 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 rny opinion. The risk of not detecting a material misstatement reslting from fraud is higher than for one resuling 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 used 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 Incity'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. I Jowever, future events or conditions may cause the I Enity 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 chose charged with governance regarding, among ocher 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 communicate with chem all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. 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 naner or, when, in extremely rare circumstances, I determine that a matter should not be 3 Japan SaciWllaveiupment Fund(JSOF fi$bncialStatements far yearended3f' December 20/8 SIR LMH commninicated in my report because the adverse consequences f doing so would reasonably be expected to outweigh tlie public interest benefits of such corlnuicatioin. N-AUDITOR GENERAL Date: Japao SoCiallevelopment FlifdlJSF naaal Statements for year ended t recember 29/9 SER LcMl THE BACKGROUND TO THE PROJECT The Government of Sierra Leone (GoSL) has received grant from the Japan Social Development Fund (JSDF) to support the promotion of social reconciliation within commLnities that have been divided by the strains caused by the Ebola Virus Disease (EVD) and to strengthen social protection responses by promoting social mobilization, thus building resilience and protecting families and communities. The project is expected to support the promotion of social reconciliation within communities that have been divided by the strains caused by the Ebola Virus Disease (EVD) and to strengthen social protection responses by promoting social mobilization, thus building resilience and protecting families and communities. The project commenced in June 2017 with an expected end date December 2020. The stated project development objective (PDO) of the Strengthening Community Mobilization and Local Council Service Delivery in the Post-Ebola Context Project is to respond to the post-EVD needs at the local level in Sierra Leone by building community resilience through EVD sensitization efforts and social mobilization activities in the districts most affected by the disease Project Components * Component 1: LC social sensitisation activities (US$lmillion)- the component seeks to promote social cohesion and resilience through strengthening LC capacity and by implementing community-wide sensitization meetings, forums and health talks, diminishing the negative effects of Ebola on social trust and providing much-needed support to the victims. * Component 2: Creating social mobilization mechanisms that improve LC service delivery (US $1.6million- the component focuses on building community resilience in the two districts most affected by EVD by: (i) creating social accountability and community monitoring mechanisms for the effective delivery of social services; (ii) promoting direct citizen engagement in the monitoring of LC services: and (iii) piloting participatory budgeting * Component 3: Project management, M&E and knowledge management (US$0.15 million) - the component focuses on the operational support geared towards project management, M&E and knowledge management. 5 Japon Socailevulopmenlt Fe/d(JSIFl FinaChIStatme7tS for ended 7' fleOmber 20/ 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 Chairman, Project Technical Steering Committee Team Lead- PFMU 6 JapSOnISIEVAe1opmtfwnd(dSl SIIMLA1FinanciaStteoments for year ended 3M £'mcember2tliS STATEMENT OF RESOURCES AND EXPENDITURE 2018 Opening Bank Balance Note us IDA Special Account Resources Receipts into IDA Special Account 667,610.00 Total 667,610.00 Expenditures by Components: COMPONENT I: Local Council Social Sensitisation 317,624.47 COMPONENT 2: Creating Social Mobilisation Mechanisms that Improve Local Service Delivery 250,846.15 COMPONENT 3: Project Management 14,335.33 582,805.95 Results for the period 84,804.05 Represented by: IDA Special Account 83,749.93 Leones Account 1,054.12 8__4,804.05 These Financial Statements were approved on.... ................ .. ........2019 .......................... ...................Chairman, Project Technical Steering Committee .....................T.. . Team Lead 7 Japan SoRi&lVlaopmnft hdJS96) S7La8cilStatemeats for year ended N7lecmber 2$! STATEMENT OF RESOURCES AND EXPENDITURE 2018 Note US S Opening Bank Balance: IDA Special Account Resources Receipts into IDA Special Account 667,610.00 Total 667,610.00 Expenditures by Categories: 1 Goods, consulting services Workshop and Operating Cost 582,805.95 582,805.95 Results for the period 84,804.05 Represented by: IDA Special Account 83,749.93 Leones Account 1,054.12 84,804.05 These Financial Statements were approved on ...... ....... ......... 2019 .................................... ....................... Chairman, Project Technical Steering Committee ..........................,. -. ............... [Team Lead 8 Japm7 Soci7leveYlopmeat Fnd(JSIf) FArWAY/ Statements for yar ended J7 ldcember 2l/0 Sl11i LoN STATEMENT OF COMPREHENSIVE INCOME Note 2018 us5 Income Funding from Donors 2 582,805.95 Expenditure by Component COMPONENT 1: Local Council Social Sensitisation 317,624.47 COMPONENT 2: Creating Social Mobilisation Mechanisms that Improve Local Service Delivery 250,846.15 COMPONENT 3: Project Management 14,335.33 582,805.95 Results for the period These Financial Statements were approved on... ........... ( ........... 2019 .................... ... .. .. ............ Chairman, Project Technical Steering Committee .................. . .m.... Team Lead 9 J7sil FtOUd(JSBF) RomagcjIdStaltflOets for enddjt lRerderZ2O/B pfl1 Sg118f1P7e1 INCOME AND EXPENDITURE ACCOUNT Note 2018 Us$ Income Funding from Donors 1 582,805.95 Expenditure by Category 1. Goods, consulting services Workshop and Operating Cost 582,805.95 582,805.95 Results for the period These Financial Statements were approved onn.....n................--..-...20 ..................................... .. .*.**..**.*..*.**...*Chairman, Project Technical Steering Committee ............... Team Lead 10a Japad ocvidleeleopmentFond(JSIF9 Finmchio Statements for year ended.7P lecember 2018 STATEMENT OF FINANCIAL POSITION World Bank Funding Note 2018 UsS Assets Cash and cash equivalents 3 84,804,05 84,804.05 Funding and Liabilities Deferred income 2 84,804.05 84,804.05 These Financial Statements were approved on...:... ......... . ..... ..... ............ 2019 ............................... C. ... ....... Chairman, Project Technical Steering Committee [........... ........ ..T. Team Lead 10 Japan Sacil Development Fo7d(JSOF fifteavl Statements for year ended J1 Pecember ff STATEMENT CASH FLOW World Bank Funding Note 2018 USS Operating activities Cash receipt from third parties Cash paid to suppliers and employees 4 582,805.95 Cash flows from operating activities 582,805.95 Investing activities Acquisition of property, plant and equipment - Cash flows from investing activities - Financing activities Funding received 2 667,610.00 Cash flows from financing activities 667,610.00 Net increase/decrease in cash and cash equivalent 84,804.05 Cash and Cash equivalent at the start of the year - Cash and cash equivalent at the end of the year 84,804.05 Japan SociallevelopmentFondfJSIF) -Finsa/ Statements far year ended7 December 2hl/ SElih LM 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 recognized on the receipt of cash, and cash equivalents is recognized 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 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 its transactions are dominated in US Dollars. Transactions in all other currencies are therefore considered foreign currency transactions. Transactions and balances Foreign currency transactions are translated into the functional currency using the mid exchange rates prevailing on the dates of the transactions. c. Non-current assets Plant and equipment are expensed on the 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 Jpen SoctLWleve/opment Fund(JSIF) financal Statements for year ended 3i' Dcember Ml/8 NOTES TO THE FINANCIAL STATEMENTS (Continued) 2018 2 Deferred income USS Opening balance Funding received in 2018 667,610.00 667,610.00 Released to tie income statement (Total Expenditure) (582,805.95) Balance as at 31 December 2018 84,804.05 3 Cash and cash equivalents IDA Credit -Special Account as at 31 Dec 2018 83,749.93 Leones Account (USD8 Equivalent) as at 31 Dec 2018 1,054.12 84,804.05 4 Cash paid to suppliers and employees Total Expenditure 582,805.95 13 Japan Soc'ileVe/oPn77t Fnd(JSIF) Firanl;WStatemefnts far year endd Jf l'eamber 26,/f S11Gn LONE REPORT OF THE AUDITORS ON THE SPECIAL ACCOUNT STATEMENT, US DOLLAR ACCOUNT NUMBER0112008024 I have audited the accompanying Special Account numbered 0112008024 established under the provision of the World Bank Funding Programme for the year ended 31s December 2018 as set out on page 15. conducted the audit in accordance with the Standards of the International Organization of Supreme Audit Institutions (NTOSAI) 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 from 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 Grant agreement and World Bank Funding Programme disbursement procedures, The accompanying special account statement gives a true and fair view of the ending balance for the year ended 3 1' December 2018. In accordance with the provisions of the terms of reference for 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. A, AUDITOR GENERAL Date - 14 Japan SciulleveopmenFdfdSIF Fnancia/lStatements for)ear aendd7/' 1ocmber 2/118 REPORT OF THE AUDITORS ON THE SPECIAL ACCOUNT STATEMENT, US DOLLLAR ACCOUNT NUMBER 0112008024 SPECIAL ACCOUNT STATEMENT 2018 World Bank Funding US$ Account No: 0112008024 Depository Bank Bank of Sierra Leone Address: Siaka Steven Street Related Credit Agreement - TFO A4737 Currency: United States Dollars Part A- Account Activity USS Opening Balance I st January 2018 Replenishment 667,610.00 Amount withdrawn 582,805.95 Ending Balance as at 31 December 2018 g8 4,804.05 15 . , -Japan Sacif/tnveopment Fund(JSF) -Fh»neacia/Sttements for year sndedgr tgecembor 2/8 Schedule of Fixed Assells Receipt Tpe Description aueICos Number Location Assignee Fundn anageiel, Dec k 9häry218 F unk,urie ExecutkeCh3 !r 5 J4 JS DFIDcC eci13/1d Dec kec- Ycu. 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