I AUDITED FINANCIAL STATEMENTS OF THE FLOOD RISK MANAGEMENT PROJECT FINANCING AGREEMENT .N'2. 5474-GY - FOR THE YEAR ENDED 31 DECEMBER 2018 AUDITORS; AUDIT OFFICE 63 HIGH STREET KINGSTON GEORGETOWN GUYANA REII~·, w -~""~ ;, ~- _., : t~ ~_ ..t _. ~, ON I _ .~ JUN ·, ; 2019 PE~ . · ., ~ , ..::~..Y ! Ml 1'1 ..:, ,-.-\ '( I •- ' .. ~.,., ·-·--- ll)"Tr;•1r.-l\ t AUDITED FINANCIAL STATEMENTS OF THE FLOOD RISK MANAGEMENT PROJECT FINANCING AGREEMENT NO. 5474 - GY FOR THE YEAR ENDED 31 DECEMBER 2018 TABLE OF CONTENTS PAGE TRANS MITT AL LETTER 2 AUDITOR'S OPINION ON THE STATEMENT OF CUMULATIVE INVESTMENT 2 STATEMENT OF SOURCES AND USES OF FUNDS AND ASSET REGISTER 3 AUDITED STATEMENT OF CUMULATIVE INVESTMENT 4 STATEMENT OF SOURCES AND USES OF FUNDS AND ASSET REGISTER 4 AUDITOR'S OPINION ON THE ELIGIBILITY OF EXPENDITURE 14 5 AUDITOR'S OPINION ON THE-DESGINATED ACCOUNT RECONCILIATION 16 6 AUDITED DESIGNATED ACCOUNT RECONCILIATION STATEMENT 18 7 AUDITOR'S OPINION ON COMPLIANCE WITH THE FINANCING AGREEMENT 19 AND THE RELEVANT LAWS :Ai.ND REGULATION 8 COMPLIANCE WITH THE FINANCING AGREEMENT 21 9 MANAGEMENT LETTER 24 ~ui,;t Wlftce of 8f wyana PP.r@. 'PlJoa 1002, 6:J ~ ~ ~, 8J~1,, 8Jw;;a,na rffel.. 5.92-225-75.92, ~ edjr,://www.audit.~-n aa: 5.92-226-7257, l 139/IDA: I 5/2/2019 14 June 2019 Ms. Delma Nedd Permanent Secretary Ministry of Agriculture Regent and Vlissengen Roads Georgetown. Dear Ms. Nedd, RE: AUDIT OF THE FINANCIAL STATEMENTS OF THE FLOOD RISK MANAGEMENT PROJECT IDA CREDIT N~. 5474-GY FOR THE YEAR ENDED 31 DECEMBER 2018 I forward herewith two (2) copies of the audited financial statements for the above-mentioned Project for the year ended 31 December 2018, together with the Report of the Auditor General and management letter thereon. Should you need any clarification or explanation, please do not hesitate to let me know. With kind regards. cdudit W!Jce o/ ~~ 'PJ)_'(J_ 'PlJoa; ,002, 63 ~r ~ ~, ffl~i, ff/wpmi dTe/: 5.92-225-75.92, ~aa: 5.92-226-7257, Mtf,,://(,/)«JW.rmdit.°"?.n 138/IDA: 15/2/2019 14 June 2019 Ms. Hongyu Yang Task Team Leader Human Development Department Latin America and Caribbean Regional Office World Bank 1818 H Street N.W Washington D.C 20433 USA. Dear Ms. Yang, RE: AUDIT OF THE FINANCIAL ST A TEMENTS OF THE FLOOD RISK MANAGEMENT PROJECT IDA CREDIT }fa. 5474-GY FOR THE YEAR ENDED 31 DECEMBER 2018 I forward herewith one ( 1) copy of the audited financial statements for the above-mentioned Project for the year ended 31 December 2018, together with the Report of the Auditor General and management letter thereon. · Should you need any clarification or explanation, please do not hesitate to let me know. With kind regards. ~ ~ ~ 1002, 63 AG: 63/2019-1 efl;t,. S.92-2tS-76.9t, ~~- 5.92-226-7257, /euf,.-/1. 14June2019 REPORT OF THE AUDITOR GENERAL ON THE Ill! STATEMENT OF CUMULATIVE INVESTMENTS STATEMENT OF SOURCES AND USES OF FUNDS AND THE ASSET REGISTER OF THE FLOOD RISK MANAGEMENT PROJECT I FINANCING AGREEMENT (CREDIT NUMBER 5474-GY) FOR THE YEAR ENDED 31 DECEMBER 2018 Opinion ' I have audited the financial statements of the Flood Risk Management Project which comprise the Statement of Cumulative Investments as of 31 December 2018, the Statement of Sources and Uses of ' Funds, and the Asset Register for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In my opinion, the accompanying financial statements of the Flood Risk Management Project for the year ended 3 1 December 2018 have been prepared in all material respects, in accordance with the financial reporting requirements of Section 4:09 of the Financing Agreement (Credit Agreement Number 5474- GY) dated 10 October 2014 between the Government of Guyana and the International Development Association. Basis of Opinion I conducted my audit in accordance with International Standards on Auditing (ISAs) issued by the lnternanonal Federation of Accountants (lFAC), the International Standards of Supreme Audit Institutions (ISSAls) and the Audit Act 2004. My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Project in accordance with the ethical requirements that are relevant to my audit of the financial statements in Guyana, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with the requirements established in Section 4:09 of the Financing Agreement (Credit Agreement Number 5474-GY) and for such internal control as management determines is necessary to enable the preparation of statements that are free from material misstatement, whether due to fraud or error. 2 Auditor's Responsibilities for the Audit of the Financial Statements My objective is 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 ISAs and ISSAis 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. As part of my audit in accordance with ISAs and ISSAis, I exercise professional judgment and maintain professional skepticism 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 control. • 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 Project's internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • 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. AUDIT Of FTCE 63 HIGH STREET KINGSTON GEORGETOWN GUYANA 3 .., GOVE~'1MENTOFGUYANA MINISTRY OF AGRICULTURE AGRICULTURE SECTOR DEVELOPMENT UNIT Name of Project: FLOOD RISK MANAGEMENT PROJECT (FRMP) IDA CREDIT NO. 5474 - GY Statement of Cumulative Investments For the Period 1 January 2018 - 31 December 2018 Previous period as at 31 Current Period 1 January Cumulative as at 31 Categories December 2017 to 31 December 2018 December 2018 USS USS USS I. Goods, works, non-consulting services, consultants' services, Operating Cost and Training for the Project 6,956,001.81 2,271.059. l 3 9,227,060.94 ' Total 6,956,00 l.81 2,271,059.13 9,227,060.94 ' Chief Technical Officer ,__10\'l-..745 57 109,Nl 57 0 256 659 OJ 144.168 04 112,4'.>0W 366404.60 253,914 112.~9() 9') 2 Suocrvisron of Work~: Con:,1ruc11011 of Pumo Stnnons Lot I -3 164.162 12 164.162 12 0 11608000 116,0KI) 00 280,242.12 280,242 3 Gcotcchuical luvcstlgauou al Lusignan. Buxton & Hopc/Enmorc, Ea3t Coast Dcmcrnru, Reg ff 4 ~·941 89 47.94189 0 (I 47,941.89 47,941.89 Total sub-component J.J Jli,K49 5k Jll .K49.5M 0 )72.739 0) 260.248 (14 112,490 99 694,588.61 582,097.62 112,490 99 TOTAL COMPONENT I 6,JlU/0.67 6,JlO,J/1.67 0 J,4511.509. 76 1,146,JJ0.18 i,304,179.4& 9,770,110.JJ 1,466,640.95 l,304,/79.'8 Component, 2: lnslhu1ional S1rtn2thenln2 for Flood Risk Reducrion Sub-Compenent 2.1 Impruveruent of Dam Safely Svstems I .Coustrucuo n Suocrvrsion & Oualuv Assurance Plan nus 63 31,11863 () 0 (I 0 31.11R63 31,118.63 0 2. Uodulln" und Tru1111nu ofthe OMS Plun for the bDWC 40480 00 40 48000 0 0 (I 0 40,4!0 00 40480.00 0 3 Instrument Plan 20745 77 20,745 77 0 0 0 0 20.745 77 20,74S.77 0 4. Emergency Preparedness Plan {l!PP) 0 0 0 - 40.630 00 0 40,630 00 40 610 00 0 40.6]0 00 5. Mamtance and trnprovmg cf Hydromcr mstrurncnb 42189 00 42.48900 0 0 0 0 42,4•9 no 42,489.00 0 Total 1uh-compone.111 2. I /J6 21,169.66 JM.741 00 Total sub-component 1.2 21)69.66 11, /69.66 0 IJJ,971.00 0 /ZJ,97/.80 U5,U0.66 11,169.66 113,971.00 {.,, GOVERNMENT OF GUYANA MINISTRY OF AGRICULTURE FLOOD RISK MANAGEMENT PROJECT (FRMP) IDA CREDIT NO. 5474 - GY EXPENDITURE BY PROJECT COMPON~:NT For the Period I January 2018 to 31 December 2018 ---· ----- ... - -·· - - Cumulative as al 31 December 2017 Current Period I January to 31 December 2018 Cumulative as at 31 December 2018 COMPONENTS Budgttcd Actuals Variance Budgeted Actuals Variance Budgeted Actuals Variance Sub-Componeut 2.3: Support Flood Risk Managtmenl, Drainage and lrrle:lltioo sector-related Communications Actlvlcles I Cormnucunou and outrcuch br-annuul ucuviucs to add rcss stakeholders und partners 0 0 0 40,290 56 1,115 11 39.175 40,290 >b 1,115.11 w.11,_.s Total sub-.compo11en11.1 0 0 0 40,2\IO 56 1,115 II W,175 40,290.5(, 1,11 'i. II )9,1754~ TOTAL COMl'ONENT 1 lll,I/OJ,06 /S6,0IJ.06 0 20J,119I.S6 l,IIS./1 101,776.JS 360,894.61 157,116.17 103,776.45 Component. J: Prulect Mana2en,ent and lmplen,entatlon Support Sub-Component J.I: Project Management and lmplen,entation Suuuort I Prower Coordmaror 141.30000 144,30000 0 47,100 00 44 10000 3,000 00 191 400.00 18S 400.00 l,OOO(MJ 2 Procurement OOtccr ''.930 74 ,t ,930 74 0 0 0 51,930.74 51 930.74 0 3. Senior C1vtl bnumect I lt,965 00 116,965 00 0 )8.465 00 )8,4(15 l)(J 0 155,430.()() ISSAJ0.00 0 4 Fmancc Officer ll.950 0( ) J6,9l0 00 () 0 0 0 36 950 00 36 950.00 0 S Audn Services 0 0 0 0 0 u 0 ll 0 6 Office Sunoort Staff )i,[)2905 13,02905 0 9,JJ9 45 7,14949 2,189 '16 22 368.50 20 178.54 2.18996 7 Stunonarv & Office Sunnhes 1,154 28 6,15128 0 21,00000 821 11 20.178 K'J !7 154 28 6.975.39 20.178 89 M. Vehicle Opcruuon and Mam1a111.:11cc(Supply of l·ucl and Lubncantsj 2;,159 )6 22,15U6 0 25.786 05 8,777.86 17.ClOi 19 47 945 41 JO 937.22 1700819 9 Office Mumtcnaucc & Ovcmcuds 5<.00811 59,00I 11 0 42,000 01 24,300 28 17,6!19 7.l 101,()(J!! 12 83 308.39 17.6'1'17l I 0. Computers & Otlicc bqu1pmcn1 !l.191 54 29,191S4 0 35,000 00 0 )5,000.00 64,191.54 29,191.54 l5,000 00 TOTAL COMPONENT J 47\6111.0/I 419,6/JLIIJ 0 116,690.JI 123,6/J,74 95,076.77 696,178.59 603,JOl.112 9S,076. 77 - TOTAL COMPONl:.'NTS I io s 6,~1.11 6,956,111.11 • J,874,091.83 l,171.059.13 1,683,'31. 7t tt.ue,19J.~ 9,227,161.94 1,603,832.10 ?' GO VERNM ENT OF GUY ANA MINISTRY OF AGRICULTURE AGRICUL. TURE SECT OR DEVEL O PM ENT UNIT FLOOD RISK M ANAGEM ENT PROJECT (FRM P) ID A CRE DIT NO. 5474 - GY Loan Budget - Financial Perfo rmance by Category For the Period Ending JI December 2018 Cununularive Disbursement as at Total Allocatim Current Disbursement as at 31.12.2018 31.12.2018 Available Balance Categories SDR USO SDR USO SOR USO SOR USD I. Goods, works, non-consulting services, consultants' services, Operating Cost and Training for the Project 7,700,000.00 10,692,526.40 1,630,781.64 2,271,059.13 6,625,684.64 9,227,060.94 1,074,315.36 1,465,465.46 !I MINISTR\' OF AGRICULTLRE AGRICULTURE SECTOR DEVELOP:\1ENT 1,,NIT(ASD\J FLOOD RISK MANAGEMENT PROJECT CREDIT NO. 5474-GY ___ .,_ FIXED ASSETS REGISTER -Dot.ti 1&08,Z0l5 U<>I0/15 -'-# ASDL, FRMP 0£001 ASDU,FR'1P OEIOOl -'-ea-... OFFICE EOLlP\1E' ASDU/FRMPIOE/011 OFFICE EQUIPMC1'T 12000btu AC tJnn NIL ASDU 140,000 Workmg Ccodruon 17, 11 Z0l6 ASDU,FRMP OE,012 OFFICE EQl,IPMEITT Panas.on1c: Blad,; .\t1auv.·nc 6AN-IJ4030S ASDL Jl,995 Worlon)': Ccedruce 06,10/15 ASDUIFRMP COM/001 COMPUTERS Dell l..Jtuudc 34.50 Notebook c~11er 9JTXK52 M,0.A 298,JOO Work.mg Coedmon 06llllil5 ~sou. FRMP COM/002 COMPUTERS Dell Lamudc 3450 ~ebook Comn utcr 1DTXK.S2 ASOU 198.300 Workuur. Cond111on 06,I0,15 ASDU. l'RMP COM/OOJ CDMPLTERS Dcl1 Lamudc 1450 'lolotcboolr.: Comoutcr 1SKOSY1 MOA 298.300 Workme Condtuon 06/10/IS ASDUIFRMPiCOM/004 COMPUTERS Dell Uutudc J.450 Notebook Comnuta 7LKOSY! ASDu 29~.JOO Workm2 Condition l1;08,15 ASOUIFRMP OF 00 I OFFICE FlJR.'IITURE 4 Drawer Cab1nc1. I =I. 52h , 25d, 81Ack NIL MO.A 83,520 Woriantt Condition ' 11,08,15 ASDU1FR.M:P,OF1003 OFFICE FURNITURE 4 Drawer Cab111 ' '-:IL EDWl 1,.S74..23'1 Workmt.! Condi tion 16,(16,1016 ASDU,FRMPIFE.014 FlELO EQUIPMENT Hydromct lmtrumcnL, 'IIL EO\\C' 1,625.SOO Worlum.i. Condition Eng.> osssns 52R911EN. ChuS<• DH.KC:EBALHG ASDVFRMP FE,001 FIELD EQUIPMENT Lone Reach Excavator 00184-13 towc !9,000.000 WorkinR Condihon I 09 09 16 Eng.• DB5RTIS 629666CN. ("I,..,... DHKCEBACEG 09 09 16 ASDL,fRMP FE,OOJ FIELD EQUIP\1E'ff Loo11: Reach Excavator 0018489 EOWC I 29.000,000 Worlun~ Condition Eng.• DBSRTIS 629651 EN. 09 09 16 ASDU, FRMP FE,002 FICLD CQUlPME~'T Long Reach Exc;n alor Chas.~•· OHKCEB AC.:AG OOIR4X6 Eng• DBSMTIS 629663EN. EDWC I 19,000 .000 \Vorkmg Cond111on l1wsc# DHKCEB ACKG 09d)9J'.6 ASOU. FRMP FE.005 FIELD EQUPME).T Len g Reach faca,. attK 0018496 EDWC ?9.000 .000 . Worlum.?. Cond1tK>n Eng,«- DBS8TIS 629467EN. (.1w.sc,, DHKCEBACEG 09,09 16 ASDL FRMP FE.004 FIELD EQUIPMEXf Lene Reach E.'l.c.t,. a tor I 001~9:? rowc I 19,000,000 Worktntt Condmon I Eng.s DB58TIS 629646EN. I Chauc,t, DHKCEBACCG 09•()Q1J6 ASDL FRMP FE 00<> FIELD COLIP\1E'IT Lon, Reach Exc:1,'&lor 001•504 sowc 19.ooo.oool Work1n2 Condit.Jon Q MINISTRY OF AGRJC\, LTt,;RE AGRICULTURE SECTOR DEVELOPMENT UNIT(ASDL;) FLOOD RISK MANAGEMENT PROJECT CREDIT NO. 5474-G' FIXED ASSETS REGISTER Eng.• DB51111S 001 ~500C'-. I Cbasse« DHKCEBACCG 09,09/16 ASDUFRMP FE.009 FIELD EQUIPMENT Shon Reach Excavator I 0018509 CDW<: 25.500.000 Worklou Condmon t.:nifloa1 Pontoons with Mud Bins & , .. Truh I l&Jl.2016 ASDU,FRMP FE.OIO FIELD EOUTPMENT Water Purnn JHJG8f GCAAH-50176.4 I ED\\C 53.105.905 wor nna C.: ondi uon Unifl03t Pontooru wi.th \riud Bul.S & J" Tn.sb I l8dl.20l6 ASDL,FRMP FE.01 I FlELD EOLIP'IP\1ENT Wat~Pumn JHIG~F GC AAH.JQ09QOO ED\VC 53.105.905 Woriuna Ccnduron 12;24118 ASDU,FRMP FE.014 FIELD EQt.;IP'IT PROJECT (FRMP) IDA CREDIT NO. 547~ - CY DESIGNATED ACCOl.:NT RECONCILIATION STATEMENT FOR THE PE:RIOD I JA.'\'liARY - 31 DECEMBER 2018 LOANICREDIT/PPFICOFINANCIER NUMBER: 5474 - GY ACCOUT NUMBER: 33681112 CROWN AGENTS BA.'iK USS 1 ITOT AL ADVANCED BY WORLD BANK (OR COFINANCIER) I 0.692.363. 73 LESS: ELIGIBLE EXPENDlTURE FOR THE CURRENT YEAR ENDED 31 DECEMBER 2018 DOCVME~TED BY WORLD BANK 3.799,273.52 LESS: CUMULATIVE ELIGIBLE EXPENDITURE FOR THE PRJOR PERIODS ENDED 3 I DECEMBER 2017 DOClJME>ITED BY 2IWORLD BANK 5,098,858.52 JI PRESENT OUTSTA:-IO!NG AMOU1'rT ADVANCED TO THE DESIGNATED ACCOI.NT (I -2) I, 794.23 I .69 BALANCE OF USO DESIGNATED ACCOUNT PER BANK RECONC!LIA TION ST ATEMENT AS AT PERIOD E:-.'D 31 DECEMBER 2017 378.309.29 4IBALANCE OF PROJECT ACCOUNT PER BANK RECONCILIATION STATEMENT AS AT PERIOD END 31 DECEMBER 20 I 8 1.086.993.S I PLUS: ELIGIBLE EXPENDITURE FOR THE ClJRRENT YEAR DOCUMENTED AFTER THE PERIOD END 31 DECEMBER 2018 5l(WA# 16) 328.928.88 6IPLUS: TOTAL AMOUNT WITHDRAWN AND NOT YET CLAIMED REASON: _ 0 7IPLUS: AMOUNTS CLAIMED IN PREVIOUS APPLICATIONS NOT YET CREDITED AT DATE OF BANK STATEME'-ITS 0 APPLICATION NO WA#XXX WA~XX SUBTOTAL OF PREVIOUS APPLICATIONS NOT YET CREDITED 8ILESS: INTEREST EARNED ~!TOTAL ADVANCE: ACCUl.,NTt:.D ~OR (NU. 4 THROul.JH NU. 9f I. 794.23 I OIS l0IDfFFERENCE (J - 9) 0 11 EXPLANATION OF ANY DIFFER.ENCE SHOWN IN LINE IO ~~t,.E.Ni. SEC~:--.., /q_(c,,~ · TI_,\ C:.._ ~.4' • Chief Technical Officer ~ ~Rt;f11(\.)\.-1~~;,,7 Permcretary Ministry of Agriculture Ministry of Agriculture The accompanying notes form an integral part of these Financial Statements f8 c;fJ';/.. 5.!JZ-225-75.92, aa:.· 59:l-Z26-n57, c;?"' AG: 63/2019-4 14June2019 REPORT OF THE AUDITOR GENERAL ON THE COMPLIANCE WITH THE FINANCING AGREEMENT AND THE RELEVANT LAWS AND REGULA TIO NS FOR THE FLOOD RISK MANAGEMENT PROJECT FINANCING AGREEMENT (CREDIT NUMBER 5474-GY) FOR THE YEAR ENDED 31 DECEMBER 2018 Opinion I have audited the financial statements of the Flood Risk Management Project which comprise the Statement of Cumulative Investments as of 31 December 2018, the Statement of Sources and Uses of Funds, and the Asset Register for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In my opinion, the Flood Risk Management Project complied with Articles II to IV of the Financing Agreement (Credit Number 5474-GY) and the relevant laws and regulations for the year ended 31 December 2018. Basis of Opinion I conducted my audit in accordance with International Standards on Auditing (ISAs) issued by the International Federation of Accountants (IF AC), the International Standards of Supreme Audit Institutions (ISSAls) and the Audit Act 2004. My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Project in accordance with the ethical requirements that are relevant to my audit of the financial statements in Guyana, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with the requirements established in Section 4:09 of the Financing Agreement (Credit Number 5474-GY) and for such internal control as management determines is necessary to· enable the preparation of statements that are free from material misstatement, whether due to fraud or error. 19 Auditor's Responsibilities for the Audit of the Financial Statements My objective is 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 ISAs and ISSAls 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. As part of my audit in accordance with ISAs and ISSA ls, I exercise professional judgment and maintain professional skepticism 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 control. • 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 Project's internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • 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. AUDIT OFFICE 63 HIGH STREET KINGSTON GEORGETOWN GUYANA 20 MINISTRY OF AGRICULTURE - ASDU FLOOD RISK MANAGEMENT PROJECT IDA CREDIT NO. 5474 - GY FOR THE PERIOD ENDING 31 DECEMBER 2018 Compliance with Financing Agreement Article II - Financing 2.02 According to this Article, the Recipient may withdrawal the proceedings of the Financing in accordance with Section IV of Schedule 2 to this Agreement. During the period under review, the amounts withdrawn were in accordance with Section IV of Schedule 2 to the Financing Agreement. Therefore, the requirement of this Article was met. 2.03 This Article stipulates that the Maximum Commitment Charge Rate payable by the Recipient on the Unwithdrawn Financing Balance is one-half of one percent(½ of 1 %) per annum. It was observed during the period under review that the Maximum Commitment Charge Rate payable by the Recipient did not exceed that stipulated in the Financing Agreement Therefore, the requirement of this Article was met. 2.04 The Service Charge payable by the Recipient on the Withdrawn Credit Balance shall be equal to three-fourths of one-percent(¾ of 1 %) per annum. During the period under review, the Service Charge payable by the Recipient on the Withdrawn Credit Balance did not exceed that stipulated in the Financing Agreement and therefore, the requirement of this Article was met. 2.05 The Interest Charge payable by the Recipient on the Withdrawn Credit Balance shall be equal to one and a quarter percent (1.25%) per annum. During the period under review, the Interest Charge payable by the Recipient on the Withdrawn Credit Balance did not exceed that stipulated in the Financing Agreement and therefore, the requirement of this Article was met. "'' 2.06 The Payment Dates are June 1 and December l in each year. The Government of Guyana paid to the Association, the sums of US$ 92,265.97 on I June 2018 and US$ 104,162.19 on 3 December 2018 Therefore, the requirement of this Article was met. 2.07 The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in the Agreement. According to the repayment schedule, the amounts to be paid to the Association are due in June and December each year, with the first repayment on 1 December 2019 and the last on 1 June 2039. Therefore, the requirements were not applicable during the period. 2.08 The Payment Currency is United States Dollars. The amount paid as Service Charge was in United States Dollars and therefore, the requirement of this Article was met. Article III - Project 3.01 The Recipient declares its commitment to the objective of the Project. To this end, the Recipient shall carry out the Project through its Ministry of Agriculture in accordance with provisions of Article IV of the General Conditions. The Recipient declared its commitment to the objective of the Project and the activities of the Project -.,vere undertaken through the Ministry of Agriculture. The requirements uf this Article were therefore met. 3.02 According to this Article, the Recipient shall ensure that the Project is carried out in accordance with the provisions of Schedule 2 of the Financing Agreement. During the period under review, the activities of the Project were carried out in accordance with the provisions ofSchedule 2 of the Financing Agreement. 'I '\ Art icle IV - Effectiveness; Tenn ination 4.01 The Additional Conditions of Effectiveness consist of, namely, that the Project Operations Manual has been adopted by the Recipient pursuant to Section l.C.1 of Schedule 2 to this Agreement. During the period under review it was observed that the Recipient through the Ministry of Agriculture has prepared and adopted the Operational Manual and is executing the Project in accordance with the terms of the Operations Manual. 4.02 Without prejudice to the provision of the General Conditions, the Effectiveness Deadline is the date ninety (90) days after the date of this Agreement, but in no case later than the date eighteen (18) months after the Association's approval of the Financing, which expires on December 4, 2015. It was observed that the Project date of effectiveness was on 25 November 2014 which did not exceed the expired date in the Financing Agreement and therefore, the requirement of this Article was fully met. 4.03 For purpose of Section 8.0S(b) of the General conditions, the date on which the obligations of the Recipient under the Agreement (other than those providing for payment obligations) shall terminate is twenty years after the date of this Agreement.