Report No: FIN-2018-39 (E) 31 May 2018 SUSTAINABLE FISHERIES RESOURCES DEVELOPMENT PROJECT MINISTRY OF FISHERIES AND AGRICULTURE FINANCIAL YEAR 2017 9 C~~~~ t,C~ C - ' TABLE OF CONTENTS A ud itor G eneral s R eport ................ .............. ...................................................... Financial Statement Statem ent of Receipts and Paym ents............. ............................................ . 5 N otes to the financial statem ent ..............................................................................................6 ml Dim [mlm lliRAF Ficf AUDITOR GENERAL'S REPORT TO THEk MINISTY OF FISHERIES AND AGR1CULTURE&F_ ON THE FINANCEIAL STATEMENT OF SUSTAINABLE FISHERIES RESOURCE DEVELOPMENT PROJECT Opinion We have audited the Project's financial statement of Sustainable Fisheries Resources Development Project financed by the World Bank/Intemational Development Association (IDA). This financial statement comprises of the Statement of Receipts and Payments for the financial period 14 June 2017 to 31 December 2017 and notes to the financial statement, which includes a summary of significant accounting policies and other explanatory information set out in pages 4 to 8. In our opinion, the accompanying financial statement presents fairly, in all material respects. the cash receipts and cash payments for the financial period ended 31 December 2017 and cash balances as at the then ended period in accordance with International Public Sector Accounting Standard: Financial Reporting under the Cash Basis ofAccounting. In addition, we can provide assurance that: (a) The funds provided under the Grant have been utilised for the purposes for which they were provided; (b) The Special Account transactions and its balance as at 31s" December 2017 have been presented truly and fairly on the financial statement, in accordance with International Public Sector Accounting Standard: Financial Reporting under the Cash-Basis of Accounting, and the cash balance as at 31" December 2017 shown on the Statement of Receipts and Payments reflects the cash balance which is reconciled to that of the Special Account; (c) The Financial Monitoring Reports furnished to the World Bank could be fairly relied upon to support the applications for withdrawals in accordance with the requirements specified in the Grant Agreement; and adequate supporting documentation have been maintained to support claims made to the IDA, for reimbursement of expenditures incurred and which expenditures are eligible for financing under the Grant Agreement, and (d) The Procurement guidelines of the World Bank have been complied with in the procurement of goods and services under the project. u enerals Office j Ghaazee Ruilding Ameer Ahmed Magu Male', Republic of Maldives +960 332 3939 i hbWaudit.pov.mv |1vNy.audiLov.n 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), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of the management and those charged with governance for the financial statements The Management is responsible for the preparation and fair presentation of this financial statement in accordance with the International Public Sector Accounting Standard (IPSAS): Financial Reporting under the Cash Basis of Accounting. This responsibility includes: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statement that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Those charged with governance of the project is responsible for overseeing the Project's financial reporting process. Auditor's responsibilities for the audit of the financial statements 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 scepticism 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 nion on the effectiveness of the Project's internal control. itor Generals Office Ghaazee Building I Ameer Ahmed Magu j Male', Republic ofMaldives GE O +960 332 3939 iib idi1eo;- .ini j!,wwudito' m -2- * 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. We communicate with those charged with governance of the project 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. 31st May 2018 Hassan Ziyath Auditor General Auditor General's Office I Ghaazee Building I Ameer Ahmed Magu I Male', Republic of Maldives +960 332 3939 infor'auditotnv y wyvAaudit.gov-mv -3- MINISTRY OF FISHERIES AND AGRICULTURE SUSTAINABLE FISHERIES RESOURCES DEVELOPMENT PROJECT STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD 14 JUNE 2017 TO 31 DECEMBER 2017 Note For the period 14 June 2017 to 31 Dec 2017 USD Receipts Disbursements/Receipts 3 3,921,776 Receipts - Retroactive financing 4 50,712 Total Receipts 3,972,488 Payments Improvement of Institutional Capacity in 5 (43,493) Marine Fisheries Management Support to Mariculture and 6 (4,025) Diversification of Fisheries sector Project Management, Monitoring and 7 (125,063) Evaluation Total Payments (172,580) Increase/(Decrease) in Cash 3,799,908 Cash at beginning of the period - Increase/(Decrease) in Cash 3,799,908 Cash at end of the period 3,799,908 Management of the Project is responsible for the preparation and presentation of the financial statement, The Statement of Receipts and Payments was approved by PMU on 31" May 2018. Signed for and on behalf of the Project: Ms.Zaha Waheed Ms. Enas Naseer Project Director Financial Executive The acc nting policies and notes on pages 5 through 8 form an integral part of the Statement o MINISTRY OF FISHERIES AND AGRICULTURE SUSTAINABLE FISHERIES RESOURCES DEVELOPMENT PROJECT W'0 OS THf FINANCIAL STXTEMIENTS PROJECT IN FORMATlION 1.1 PROJECT TITLE: Sustainable Fisheries Resources Development Project 1.2 STARTED DATE: 17-04-2017 1.3 CLOSING DATE: 31-12-2022 1.4 PROJECT DURATION: 60 Months 1.5 APPROVED BUDGET: US$ 18,000,000 (Eighteen Million U.S. Dollars) 1.6 FUNDED BY: Regional International Development Association Gyant & International Development Association Grant 1.7 TRUST FUND MANAGER: World Bank 1.8 Objective The objective of the project is to improve management of fisheries at regional and national levels including support to establish mariculture in targeted atolls in Maldives The project comprises of three main components; Component A: Augmentation of Institutional Capacity for Marine Fisheries Management (US$ 5.09 million) The objective of this component is to enhance the Government's capacity to implement a more effective monitoring of the fisheries sector and internal control system of key marine fisheries value chains and will focus on delivcry of the Indian Ocean Regional Agenda. This includes four sub-components. (Al) Development of key fisheries management and planning instruments; To update the fisheries policy and legislative framexkork, zoning the entire Maldivian EEZ, and supporting grouper fish management, coral reef and reef fishery management plans which are essential for regional conservation and improved compliance with IOTC recommended conservation and management measures. (A2) Development and Implementation of fisheries management activities; To ensure compliance with IOTC and EU requirements, including expanded MCS, vessel registration and monitoring systems, electronic observer systems and augmentation of related reporting systems for commercial marine fisheries; collaboration with the SWIO Sub-Regional Fisheries Monitoring Centers; and, support and facilitation to regional agencies and international actors on the common agenda of conservation and management measures. Ministry of Fishenes anc Agrculture, Velaanaage, 7 Floor, Ameeru Ahmed Magu, Male, Maldives. Tel (960) 332 2625, Fav +(960) 332 6558, e-mai admin@fishagri.gov.mv 5 MINISTRY OF FISHERIES AND AGRICULTURE SUSTAINABLE FISHERIES RESOURCES DEVELOPMENT PROJECT (A3) Support to long-term program for fisheries management; It includes sampling programs for tuna and recreational fish species. stock assessments and conservation zone surveys which will contribute to regional assessments and subsequent actions: the preparation of protocols for disease surveillance and quality control of brood stocks and fish feed. (A4) Fisheries sector capacity building Including short and medium-term training, development of curriculum and teaching aids, collaboration with National Geographic Information System (GIS), and development and operation of a fisheries management information system- all focusing on strengthening local and national skills that will contribute to the national and SWIO Region agenda related to fishery management and consequent diversification into mariculture. Component B: Support to Mariculture and Diversification of Fisheries (USS10.76 million) Potential economic growth from diversification of capture fishery and from mariculture are pre-requisites for sustenance of the capture fishery resources in the Maldi% ian LFZ. However. mariculture is nascent in Maldives: to be able to develop this sector, research. demonstration and provision of extension services w ill pla\ key roles in addition to the three primary inputs: seeds, feed and access to finance. The four sub-components include: (BI) Development and demonstration of mariculture production and technology package; Including completion and operationalization of the infrastructure, and preparation of medium-term operations plans and service standards for the Maniyafushi research and development facility (MRDF) as a centre for the excellence for the entire SWIO region: development and demonstration of technology packages for mariculture species; and market studies in support of mariculture choices. (B2) Promotion of mariculture out-grower schemes and seafood growth clusters; Including assessments of carrying capacity and of supporting community custodianship of the coral reef resources, start-up investments including training. advisory support and compliance monitoring in outgrower farms, technical support to small enterprises for establishing out-grower contractual arrangements between small producers and larger private sector aggregators. and studies to help develop gender actions in mariculture. (B3) Supporting design, construction and operation of a multi-species hatchery; Including breeder stock development programs and professional training plans (B4) Scoping of long-term marine fisheries diversification studies; Including planning and scoping of studies related to technology packages and conservation plans for new marine species to be explored in future. Component C: Project Management, Monitoring and Evaluation (USS2.15 million) % The e of this component is to provide equipment, technical assistance. traininglan al a strengthen the overall administrative capacity and capability of the Ministr of n gcu a ts Project Management Unit(PMLI) to manage, implemet. and monitor anidevol t pr Mnistry ines and Agicultre Velaanaage, 7 Floor, Ameeru Ahmed Magu, Male, Maldives. Tel:+(960) 332 2625, Fax -960) 332 6558, e-maI admin@fshagngov.mv 6 MINISTRY OF FISHERIES AND AGRICULTURE SUSTAINABLE FISHERIES RESOURCES DEVELOPMENT PROJECT activities. Specifically, support will include staffing and operation of the PMU, establishment of adequate financial management and procurement management systems, implementation of the communication plan and grievance redress activities, monitoring and evaluation (M&E) and third party audits; preparation and implementation of specific environment impact assessments as per the national laws; coordination with other ministries such as the Ministry of Environment and Energy and the private sector,; special evaluation studies; and sharing of monitoring protocols, evaluation studies and specific experience of implementation of various aspects of fisheries management that are of interest to SWIO Region countries. St 1MMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1 2.1 Basis of preparation The Statement of Receipts and Payments are prepared in accordance with International Public Sector Accounting Standard: Financial Reporting under the Cash-Basis ofAccounting. 2.2 Recognition of Receipts and Payments Receipts and payments are accounted for on cash basis. Receipts are recognised when the Government of Maldives (GOM) receives the funds from World Bank. Payments are recognised at the time of outflow of cash from the bank account. 2.3 Presentation Currency The Statement of Receipts and Payments has been presented using the United States Dollars (USD). All figures have been rounded to the nearest Dollar. 2.4 Foreign Currency Translation Receipts and payments in currencies other than the reporting currency (USD) are converted at the MMA's exchange rate existing between the transaction currency and USD at the time of the receipt/payment. Cash balances in currencies other than USD as at the end of the reporting period are shown in the financial statement at the exchange rate that was prevailing at the last day of the reporting period. 2.5 Reporting Period Financial statement is generally prepared for one year (calendar year), with the exception of commencement and/or closure of the project. Whilst at commencement, the financial statement generally covers a period shorter than one year, a period longer than one year is covered for the closure of the project. Period for which financial statement is prepared is disclosed on the face of the financial statement. Financial statement for the current period covers six months and 17 days ending 3 1" December 2017. This financial statement has been prepared for less than one year for the reason that the project was commenced on 14th June 2017. Misty dAgriclture, Velaanaage, 71 Floor, Ameeru Ahmed MVagu, Malb, Maldives. Tel: (960) 332 2625, Fax: +{960) 332 6558, e-mail: admin@fishagri.gov.my 7 MINISTRY OF FISHERIES AND AGRICULTURE SUSTAINABLE FISHERIES RESOURCES DEVELOPMENT PROJECT For the period 14th June 2017 to 31t Dec 2017 Disbursements/Receipts Receipts from World Bank 3,921,776 3,921,776 4. Receipts - Retroactive financing Retroactive Financing (Spent from GOM's State Budget) 50,712 50,712 For the period 14th June 2017 to 31P Dec 2017 5. Improvement of Institutional Capacity in Marine Fisheries Manageient Capacity in Marine Fisheries Management Project 15,133 Retroactive Financing 28,360 43,493 For the period 14t" June 2017 to 31't Dec 2017 6. Support to Mariculture and Diversification of Fisheries Sector Mariculture and diversification of fishery sector Project 4,025 Retroactive Financing - 4,025 For the period 14' June 2017 to 31' Dec 2017 7. Project Management, Monitoring and Evaluation Project Management Project 711 Retroactive Financing 25,03. '9;; Minstry i W gricufture, Velaanaage, 7tn Floor, Ameeni Ahmed Magu, Male, Maldives. Tel:+(960) 332 2625, Fax: '(960) 332 6558, e-ma1: adrmin@f:shagr.gov.my 8 Ina f ^0 ym Y^= Ta Ta y^ T & T 3 Måh 0 y MT a y Måh ma ma 4 0 Yffi Teaf Maffig zyf Räh T ffly KMA ffla t JL a JL Taft ma Teft f å ;6 pa krýreta fT a i ,$T y Råa Råh Ghaazee Buildillg, Amceru Ahmed Magu Male', Republic of Maldives Tel: +960 332 3939 Email: infö(waUdit.gov.mv w~audit.gov.mv