Tel: (232-22) 220 146 Public Financial Management Improvement and Tel.: (232-72) 220 16 Consolidation Project Cell: (232-79) 358 317 - 3d Floor Email: pfmicai@rnofgovsl Sierra Leone Commercial Bank Building Lrnisp@gniadi co rn 35A Light-Foot Boston Street 1 Freetown Sierra Leone MINISTRY OF FINANCE, GEORGE STREET, FREETOWN, SIERRA LEONE GOVERNMENT OF SIERRA LEONE The Task 'learn Lender PFMICP World Bank Country Office Spur Road, Freetown Sierra Leone 27 hJUne~ 2019 Attn: Victor Boakve-Bonsu, Dear Sir, Submission of Audited Financial Reort for the Year Ende 31" December 2018 We forward herewith the Audited Financial Report of the Public Financial Management Imorovement and Consolidanion Project (PF MIl(P)for the Financial Year ended 31 December 2018. The Report is for both Designated Accounts inclusive of ASSL. We thank the Bank and other Development Partners for their unflinching support throughout the period. Sincerely yours, Adams Tomm vir,) Project Manager PFMICP Copy: Country Representative, AfDB. :inancial Secretary Principal Dcputy Financial Secretary (PDFS) Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub-Component 2.1 Financial Statements for the year ended 31 December 2018 This report contains 24 pages Appendix I page Ref S651ib/eap Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.1 Financial slatements for the par ended 31 December 2018 Contents Page General information 1 Background information on the project 2 Management's responsibility statement 3 Independent Auditor's report 4-8 Statement of resources and expenditure 9 Statement of income and expenditure 10 Statement of financial position 11 Statement of cash flows 12 Statement of changes in accumulated fund 13 Statement of budget versus actual 14-15 Notes to the financial statements 16-21 Report of the Auditors on the Special Account Statement US Dollar Account 22 Special account statement - Bank account 23 Appendix Appendix 1: Schedule of fixed assets 24 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.1 Financial statements for the year ended 31 December 20/8 General information Office Audit Service Sierra Leone 2nd Floor Lotto Building Tower Hill Freetown Project Director Adams Tommy Bankers Sierra Leone Commercial Bank Siaka Stevens Street Freetown Auditor Baker Tilly SL Chartered Accountants Baker Tilly House 37 Siaka Stevens Street Freetown Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 21 Financial statements for the year ended 31 December 2018 Background information on the project The Public Financial Management Improvement and Consolidation Project (PFMICP) is designed to respond to the Government of Sierra Leone (GoSL) PFM Strategy (2014-2017) that aims at strengthening the foundation of the overall PFM governance, ranging from planning, budgeting, accounting and reporting, internal audit and controls, public procurement and revenue management, to external audit and legislative and public oversight. These intervention areas under the project together constitute the core of the reforms envisaged in the Government's strategy document and was consistent with the 'Agenda for Prosperity' (2014- 2018). The project is jointly funded by the International Development Association (IDA), the World Bank Group, the Multi- Donor Trust Fund (MDTF) with funds from DFID and the EU and co-financing from the African Development Bank (AfDB). The specific overall Project Development Objective (PDO) of the Public Financial Management Improvement and Consolidation Project (PFMICP) is: "to improve budget planning and credibility, financial control, accountability and oversight in government finances in Sierra Leone". The project is made up of the following components: Component 1: Enhancing Budget Planning and Credibility: The objectives of this component are to: strengthen the macro fiscal forecasting and public investment functions of government to improve overall budget planning, and to strengthen systems and procedures for budget formulation. Component 2: Financial Control, Accountability, and Oversight: The objectives of this component are to: strengthen financial control in government, improve accountability systems and practices, and enhance independent and public oversight in the management and use of central Government public finances. Component 3: Supporting the Strengthening of Revenue Mobilization and Administration Systems: The objectives of this component are to: strengthen revenue policy and oversight of revenue collection, improve the efficiency and integrity of revenue administration to increase domestic revenue, and integrate revenue system within the overall PFM system. Component 4: Strengthening Local Governance, Financial Management and Accountability Systems: The objectives of this component are to: improve the financial management systems in local councils, and strengthen the accountability and oversight institutions to contribute to enhance service delivery efficiency and effectiveness. Component 5: PFM Reform Coordination and Project Management: The objective of this component is to ensure a continued strong institutional framework to coordinate and oversee implementation of the PFM Reform Strategy as a whole as well as manage the implementation of the proposed project. 2 Public Financial Management improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.1 Financial statements for the year ended 31 December 2018 Management's responsibility statement Management is responsible for the preparation and presentation of the financial statements, comprising the statement of financial position at 31 December 2018, and the statement of income and expenditure, the statement of resources and expenditure, statement of cash flows and the statement of budget versus actual for the year then ended, and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes in accordance with the basis of accounting described in note 2 of these financial statements and for such internal control as management determine is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error. Approval of the financial statements The financial statements were approved by management on 20. 19 and signed on its behalf by: Auditor-General 3 bakertilty Baker Tilly SL Baker Tilly House 37 Siaka Stevens Street P.0 Bo 100 Freetown Sierra Leone Telephone +(232) 30-444-100 Independent Auditor's report to the Government of Sierra Leone Report on the Audit of the Financial Statements Opinion We have audited the financial statements of the Public Financial Management Improvement and Consolidation Project - Audit Service Sierra Leone Sub-Component 2.1 set out on pages 9 to 21 which comprise the statement of financial position as at December 31 2018, and the statement of resources and expenditure, the statement of income and expenditure, the statement of cash flows, the statement of changes in accumulated fund, and the statement of budget versus actual for the year then ended, and notes to the financial statements including a summary of significant accounting policies. In our opinion, the project financial statements present in all material respect, the program revenue and cost incurred by the project for the year ended 31 December 2018 and it has been prepared in accordance with International Public Sector Accounting Standards (IPSAS) accruals, the World Bank's Guidelines on Financial Reporting and Auditing of projects, the Bank's Disbursement Procedure Manual, terms of the Financing Agreement and the relevant procedures locally in operation. In our opinion, all the funds provided have been used exclusively for eligible expenditure and in accordance with the conditions of the relevant financing agreement with due attention to economy, efficiency and only for the purpose for which the financing was provided. In our opinion, the audited statements of expenditure can be relied upon to support the related withdrawals and supporting documents and records with respect to the statement of expenditure submitted as the basis for withdrawals are available and maintained and the provisions and covenants of the Financing Agreement including all supplementary conditions have been adhered to. In our opinion, goods and services financed from the Loan Special accounts have been procured in accordance with the relevant Financing Agreement and in accordance with the Bank's procurement policies and procedures. In our opinion, all necessary supporting documents, records and account have been kept in respect of all activities. Clear linkages do exist between the books of account and the financial statements presented to the Bank. 4 A Member Firm of the Baker Tiliy Worldwide Network of IndependentAccounting Firms Executive Chairman: Raymond M Davies, Managing Partner. Derrick L Kawaley Partners: isk A alogun, Agnes N Sawye Independent Auditor's report to the Government of Sierra Leone (continued) Opinion (continued) In our opinion, a special account has been maintained in accordance with the provisions of the Financial Agreement and in accordance with the Bank's rules and procedures. In our opinion, the financial statements give a true and fair view of the financial position of the Public Financial Management Improvement and Consolidation Project; Audit Service Sierra Leone Sub-Component 2.1 for the year ended 31 December 2018 and of its financial performance and its cash flows for the year then ended in accordance with the accounting policies adopted by the project, as stated in note 2 of the financial statements. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the project in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Sierra Leone, and we have fUlfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other Information Management is responsible for the other information. The other information comprises the general information, the background information on the project, and the management responsibility statement and the appendix which we obtained prior to the date of this report. Other information does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 5 Independent Auditor's report to the Government of Sierra Leone (continued) Responsibilities of management for the Financial Statements Management is responsible for the preparation and presentation of the financial statements in accordance with the basis of accounting described in note 2 of the financial statements and for such internal control as the Management determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the project's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management intends to cease operations, or have no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Project's financial reporting process. Our 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 our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs 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 an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We 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 our 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. 6 Independent Auditor's report to the Government of Sierra Leone (continued) Responsibilities of management for the Financial Statements * Conclude on the appropriateness of the 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 project's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Project 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; * Obtain sufficient appropriate audit evidence regarding the financial information of the activities of the project to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the project's audit. We remain solely responsible for our audit opinion. We communicate with management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. Restriction of use These financial statements have been prepared in accordance with the International Public Sector Accounting Standards (IPSAS) accruals for the purpose of determining the financial position of Public Financial Management Improvement and Consolidation Project (Audit service Sierra Leone Sub-Component 2.1) for use by the management of the project, the International Development Association (IDA), Multi-Donor Trust Fund (MDTF), African Development Bank (AfDB) and the Government of Sierra Leone and the financial statements and related auditor's report may not be suitable for another purpose. Our report is intended solely for use by the management of the project, (Public Financial Management Improvement and Consolidation Project (Audit Service Sierra Leone Sub-Component 2.1), the International Development Association (IDA), 7 Independent Auditor's report to the Government of Sierra Leone (continued) Restriction of use (continued) Multi Donor Trust Fund (MTDF), African Development Bank (AfDB) and the Government of Sierra Leone and should not be distributed to or used by parties other than the management of Public Financial Management Improvement and Consolidation Project (Audit Service Sierra Leone Sub-Component 2.1), by the project management unit, the International Development Association (IDA), Multi Donor Trust Fund (MDTF), African Development Bank (AfDB) and the Government of Sierra Leone. The Engagement Partner on the audit resulting in this independent auditor's report is Derrick Kawaley. 11 ( Ci1 Freetown Chartered Accountants Date 2,1 jtw , %,IG Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.1 Financial statements for the year ended 31 December 2018 Statement of resources and expenditure (World Bank, Multi Donor Trust Fund and African Development Bank Funding) for the year ended 31 December Notes 2018 2017 USD USD Resources Balance brought forward 542,871 64,423 Contributions received 4 - 620,714 Total resources 542,871 685,137 Expenditure Training and recruitment 6 - (2,105) Bank charges (1,737) (2,290) In-house consultant cost 7 (91,815) (130,396) Professional fees 8 (5,175) (7,475) Total expenditure (98,727) (142,266) Result for the year 444,144 542,871 Represented by: Cash and cash equivalent 5 449,803 551,701 Payables 11 (14,855) (18,035) Prepayment 10 9,196 9,205 444,144 542,871 These financial statements were approved ont.. ai 2019 ...... ... ....... Auditor-General The notes on pages 16 to 21 are an integral part of the financial statements 9 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.1 Financial statements for the year ended 31 December 2018 Statement of income and expenditure for the year ended 31 December 2018 2018 2017 Notes USD USD Income IDA, MDTF and AfDB funding 4 - 620,714 Total income - 620,714 Expenditure Training and recruitment 6 - (2,105) Bank charges (1,737) (2,290) Depreciation 7 (34,477) (34,475) In house consultant cost 8 (91,815) (130,396) Professional fees 9 (5,175) (7,475) Total expenditure (133,204) (176,741) Result for the year (133,204) 443,973 These ln cIal statements were approved on ....... ... ............. 1 9 ...... 4........ . ... . ....... 4.9.. . Auditor-General The notes on pages 16 to 21 are an integral part of the financial statements 10 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.1 Financial statements for the year ended 31 December 2018 Statement of financial position as at 31 December 2018 2017 Assets Notes USD USD Non-current asset Motor vehicles 7 31,696 63,390 Computers and accessories 7 - 2,783 Total non-current asset 31,696 66,173 Current asset Bank balance 5 449,803 551,701 Prepayment 10 9,196 9,205 Total current Assets 458,999 560,906 Total assets 490,695 627,079 Funding and liabilities Accumulated fund 475,840 609,044 Payables 11 14,855 18,035 Total funding and liabilities 490,695 627,079 These inancial statements were approved on ... 2019..........................2 1 .. . .. . .. .. .......... . . . .. Auditor-General The notes on pages 16 to 21 are an integral part of these financial statements 11 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 21 Financial statements for the year ended 31 December 2018 Statement of cash flows for the year ended 31 December 2018 2017 Notes USD USD Cash flows from operating activities (Deficit) / surplus for the year (133,204) 443,973 Depreciation 7 34,477 34,475 Operating activities before working capital (98,727) 478,448 Increase in receivables - 320 Decrease in prepayment 10 9 1,907 Decrease in payables 11 (3,180) (4,056) Net cash flow from operating activities (101,898) 476,619 Cash flows from investing activities Net cash flows from investing activities - Net (decrease)/increase in cash and cash equivalents (101,898) 476,619 Cash and cash equivalents at 1 January 551,701 75,082 Cash and cash equivalents at 31 December 5 449,803 551,701 The notes on pages 16 to 21 are an integral part of these financial statement 12 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.1 Financial statements for the year ended 31 December 2018 Statement of changes in accumulated fund for the year ended 31 December Accumulated fund USI) Balance at 1 January 2017 165,071 Surplus for the year 443,973 Balance at 31 December 2017 609,044 Balance at 1 January 2018 609,044 Deficit for the year (133,204) Balance at 31 December 2018 475,840 The notes on pages 16 to 21 are an integral part of these financial statements 13 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 21 Financial statements for the year ended31 December 2018 Statement of budget versus actual for the year ended 31 December 2018 Programme Programme budget Note budget utilisation Variance USD USD USD Annual operational objectives Funds received International Development Association 16a 546,160 546,160 African Development Bank (AIDB) - - Grand total 546,160 - 546,160 Expenses Payment of In-house Consultant for support to Performance Audit unit 16b 131,560 91,815 39,745 Capacity Building Support - training of staff in professional courses 16c 3,000 - 3,000 Development of Audit Management Information Systems (AMIS) 16d 400,600 - 400,600 General administration of project (bank charges) 2,000 1,737 263 Professional fees 16e 9,000 5,175 3,825 546,160 98,727 447,433 Reconciliation of cash balance bIf 551,701 Add: Total receipts - Expenses yet to be settled 14,855 2017 Prepayments utilised in 2018 9,205 Less: Total payments (98,727) 2017 expenses paid for in 2018 (18,035) Prepaid rent (9,196) Closing balance 449,803 The notes on pages 16 to 21 are an integral part of these financial statement 14 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.1 Financial statements for the year ended 31 December 2018 Statement of budget versus actual for the year ended 31 December 2017 Programme Programme budget Note budget utilisation Variance USD USD USD Annual operational objectives Funds received International Development Association 17a 616,461 534,415 82,046 African Development Bank (AfDB) 86,299 86,299 - Grand total 702,760 620,714 82,046 Expenses Payment of In-house Consultant for support to Performance Audit unit 17b 132,160 130,396 1,764 Capacity Building Support - training of staff in professional courses 3,000 2,105 895 Development of Audit Management Information Systems (AMIS) 17c 400,600 400,600 Replacement of old and depreciated data processing equipment 17d 155,000 - 155,000 General administration of project General administration of project (bank charges) 2,000 2,290 (290) Cost of audit for the year ended 31 December 2017 17e 10,000 7,475 2,525 702,760 142,266 560,494 Reconciliation of cash balance b/f 75,082 Add: Total receipts 620,714 Expenses yet to be settled 18,035 2016 Receivables received in 2017 1,907 2016 Prepayments utilised in 2017 9,525 Less: Total payments (142,266) 2016 expenses paid for in 2017 (22,091) Prepaid rent (9,205) Closing balance 551,701 The notes on pages 16 to 21 are an integral part of these financial statement -15 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.) Financial statements for the year ended 31 December 2018 Notes to the financial statements 1. Reporting Project According to the project financing agreement, the Government of Sierra Leone (GoSL) is to receive funding in the amount of US$ 28.5m from the World Bank, EU, DFID, and AfDB towards the cost of Public Financial Management Improvement and Consolidation Project (PFMICP).The oversight of the project's day to day operations is managed by the project management unit (PMU) of the Ministry of Finance and Economic Development. The specific overall project development objective of the Public Financial Management Improvement and Consolidation Project (PFMICP) is: "To improve efficiency and accountability of public financial management systems in Sierra Leone" 2. Significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. The policies have been consistently applied unless otherwise stated. 2.1 Basis of accounting The Financial Statements have been prepared in accordance with International Public Sector Accounting Standards (IPSAS) accruals. 2.2 Foreign currency transactions (i) 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 denominated in US Dollars. Transactions in all other currencies are therefore considered to be foreign currency transactions. (ii) Transactions and balances All payments are made in foreign currency through the bank and as a result of such, there is neither foreign exchange gain nor loss. 16 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.1 Financial statements for the year ended 31 December 2018 Notes to the financial statements (continued) 2. Significant accounting policies 2.3 Non-current assets Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. 2.4 Depreciation Depreciation is recognized in the statement of income and expenditure on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leasehold assets are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated. The applicable depreciation rates under the Project are as follows: Items Years Percentage Motor vehicles 4 25% Computer and accessories 4 25% 3. Income Funding from the World Bank and Multi Donor Trust Fund is recognized in the project's statement of income and expenditure when received. The amounts received for the period under review are as follows: 4. Contributions received 2018 2017 USD USD International Development Association (IDA) - 534,415 African Development Bank (AfDB) - 86,299 - 620,714 5. Cash and cash equivalents 2018 2017 USD USD Special account balance 449,803 551,701 449,803 551,701 17 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.1 Financial satements for (he year ended 31 December 2018 Notes to the financial statements (continued) 6. Training and recruitment 2018 2017 USD USD Examination and certification 2,105 - 2,105 7. Property and equipment Computer Motor and vehicle accessories Total USD USD USD Cost At 1 January 2017 126,778 11,126 137,904 Acquisitions - Balance as at 31 December 2017 126,778 11,126 137,904 At 1 January 2018 126,778 11,126 137,904 Acquisitions - - - Balance as at 31 December 2018 126,778 11,126 137,904 Depreciation Balance as at 1 January 2017 31,694 5,562 37,256 Depreciation for the year 31,694 2,781 34,475 Balance as at 31 December 2017 63,388 8,343 71,731 Balance as at 1 January 2018 63,388 8,343 71,731 Depreciation for the year 31,694 2,783 34,477 Balance as at 31 December 2018 95,082 11,126 106,208 Carrying amounts At 31 December 2017 63,390 2,783 66,173 At 31 December 2018 31,696 31,696 18 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.1 Financial statements for the year ended 31 December 2018 Notes to the financial statements (continued) S. In-house consultant's cost 2018 2017 USD USD Professional fees 77,440 116,160 Travel 2,365 1,645 Rent 12,010 12,591 91,815 130,396 9. Professional fees 2018 2017 USD USD Audit fees accrual for 2018 5,175 7,475 5,175 7,475 10. Prepayment 2018 2017 USD USD Balance at 1 January 9,205 9,525 Paid during the year 12,000 12,271 Utilised during the year (12,009) (12,591) Balance at 31 December 9,196 9,205 !19 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2J1 Financial staiemients for the year ended 31 December 2018 Notes to the financial statements (continued) 11. Payables 2018 2017 USD USD Withholding tax - 880 Accrual for audit fees 5,175 7,475 Accrual for consultant's December 2018 fees 9,680 9,680 14,855 18,035 12. Capital commitments Capital commitments at the reporting date were nil (2017: Nil) 13. Contingent assets and liabilities Contingent assets and liabilities at the reporting date were nil (2017: Nil) 14. Related party transactions There were no related party transaction(s) for the year (31 December 2017: Nil). 15. Events after the reporting date There were no events that occurred after the financial year end that materially affected the financial position as at 31 December 2018 (31 December 2017: Nil). 16. Budget versus actual analysis - 2018 a) The adverse variance is a result of activity that we had planned to implement in 2017 for which funds were requested and disbursed by the donor in 2017. However, this activity was rolled-over to 2018 due to the delays encountered in the procurement process. b) The reason for the favorable variance is that the previous Consultant resigned to take up another appointment in March 2018. The replacement consultant, started work in August 2018. c) This activity has been implemented and a request for refund will be made by Audit Service Sierra Leone. d) The procurement was not completed in 2018 and therefore no cost was incurred. e) Proposed audit fees for 2018. 20 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.1 Financial statements for the year ended 31 December 2018 Notes to the financial statements (continued) 17. Budget versus actual analysis - 2017 a) The adverse variance is as a result of unutilized funds in 2016 carried forward to 2017. b) As per her contract, the performance audit consultant was entitled to two weeks leave every six months and thus two return air tickets were budgeted for. However, she only went on one leave during the period under review. c) The procurement was not completed in 2017 therefore no costs was incurred. d) The procurement was not completed in 2017 therefore no costs was incurred. e) The favorable variance is due to better price negotiation. 21 Report of the Auditors on the Special Account Statement US Dollar Account We have audited the accompanying Special Account statements established under the provisions of the Programme for the year ended 31 December 2018. The Project's Management is responsible for the preparation and presentation of the Special Accounts. Our responsibility is to express an opinion on the Accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing and the World Bank Guidelines for Project Audit. Those standards require that we plan and perform the audit to obtain reasonable assurance that the Special Account statements are free of material misstatement. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Special Account statements give a true and fair view of the financial position of the project as at 31 December 2018. Freetown Chartered Accountants Date: 2 9~2 22 Public Financial Management Improvement and Consolidation Project (PFMICP) Audit Service Sierra Leone Sub Component 2.1 Financial statements for the year ended 31 December 2018 Special account statement Depository Bank Sierra Leone Commercial Bank Limited Address Freetown, Sierra Leone Related Loan Number P133424 Currency United States Dollar Part A - Account Activity USD Opening balance -1 January 2018 551,701 Add: Replenishments - Refunds Less: Withdrawals and charges (98,727) 2017 expenses paid for in 2018 (3,171) Closing balance 31 December 2018 449,803 23 Public Financial Management Improvement and Consolidation Project (PFMICP) (Audit Service Sierra Leone Sub Component 2.1) Financial statements for the year ended 31 December 2018 Appendix �� ��' � �ni w� � � � '- л ы �т с ���� � �-д с+ Е�� ai Е с � � й�, G с � � �' ,� О �� С7 С7 б Г. v� rP 'J б Гз Q w � а -�. 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