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1 AUDIOCEEASDEATET. GOJ/IBRD GRANT AGREEMENT NO. TF JM JAMAICA SOCIAL AND ECONOMIC INCLUSION OF PERSONS WITH DISABILITIES PROJECT (JSEIPD) PROGRAMME OF ADVANCEMENT THROUGH HEALTH AND EDUCATION PERIOD APRIL 1, MARCH 31, 2016 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized VISION STATEMENT "Promoting a Better Country Through Effective Audit Scrutiny of Government Operations"

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3 Ministry of Labour and Social Security - Programme of Advancement Through Health and Education (PATH) Jamaica Social and Economic Inclusion of Persons with Disabilities IBRD/GOJ Grant No. TF Period: April 1, 2015 to March 31, 2016 TABLE OF CONTENTS Audit Report on Financial Statements 1-3 Statement of Sources and Uses of Funds 4 Statement of Cumulative Investments 5 Statement of Cumulative Investments by Disbursement Category 6 Special Bank Account Statement of Transactions 7 Special Bank Account Activity Statement 8 Notes to the Financial Statements 9-16 Audit Report on Statement of Expenditure 17 Audit Inspection Report 18-33

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5 . 1 AUDITOR GENERAL'S DEPARTMENT 40 KNUTSFORD BOULEVARD P.O. BOX 455 KINGSTON 5 JAMAICA Tel, No, / Fax Number audgen@auditorgeneral gov-m GOJ/IBRD GRANT AGREEMENT No. TF JM Programme of Advancement Through Health and Education (PATI) Jamaica Social and Economic Inclusion of Persons with Disabilities Project (JSEIPD) Period April 1, March 31, 2016 AUDIT CERTIFICATE The audit of the Programme of Advancement through Health and Education (PATH) Jamaica Social and Economic Inclusion of Persons with Disabilities (JSEIPD) Project was conducted in accordance with Article 11 Section 2.07 (b) of the Standard Conditions for Grants between the Government of Jamaica (GOJ) and the International Bank for Reconstruction and Development (IBRD) dated August 14, MANAGENIENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS The executing agency, the Ministry of Labour and Social Security, is responsible for the preparation and fair presentation of these Financial Statements, in accordance with International Public Sector Accounting Standards (IPSAS) Cash Basis. This responsibility includes: designing, implementing and maintaining internal controls, relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether, due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The Ministry is also required to present audited Financial Statements to the IBRD. The attached Financial Statements and supplementary financial information which are described hereunder were submitted to me by the Project Coordination Unit (PCU) to reflect the transactions of the Programme from its inception in August 2013 to the close of the financial year at March 31, Statement I Statement 2 - Statement of Sources and Uses of Funds - Statement of Cumulative Investments - Statement of Cumulative Investments by Disbursement Category

6 2 Statement 3 - Special Bank Account Statement of Transactions for period April 1, 2015 to March 31, Special Bank Account Activity Statement for period April 1, 2015 to March 3 1, Notes to the Financial Statements AUDITOR's RESPONSIBILITY My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the auditing standards issued by the International Organisation of Supreme Audit Institutions (INTOSAI). Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. These Statements and the supporting accounting transactions and records were examined in accordance with generally accepted auditing standards recommended by the INTOSAl and accordingly, included such test and other procedures as I considered necessary. I have obtained all the information and explanations which I required. OPINION- FINANCIAL STATEMENTS In my opinion, the appended Statements 1-2 and Supplementary Financial Information reflect a true and fair view of the transactions of the Project for the period under review and the transactions conformed to the terms of the Grant Agreement. COMPLIANCE WITH APPLICABLE LAWS, REGULATIONS AND FINANCIAL CLAUSES OF THE GRANT AGREEMENT During the period under review, I examined compliance by the Project Coordination Unit of the Executing Agency with the applicable laws and regulations related to the Project's financial activities and with the accounting/financiall management clauses of the Grant Agreement No. TF JM. There was general compliance with the following articles contained in the Grant Agreement mentioned: Article 1 - Standard Conditions Article I - Project Execution Section 2.05: Project Monitoring, Reporting and Evaluation Section 2.07: Procurement Article III - Withdrawal of Grant Proceeds

7 Orislos - G ENERA L ln my opinion. the IPCUt maintained an adequate accounting system basedi on separate and clearl identilable accounts which enabled ihe iecording, monitoring and reporting ol the operations and costs under the programme in accordance with satisfactory accounting/fi mancialimanagement praceices and standards as required by Article Il Section 2.06 (a) of the Grant Agreemeni. AUDIT OF THE SPECI.AL BANK ACCOLINT l have examined the appended Special Bank Account Statement - Statement 3. relleeting the movement in the Special Bank Account for the period ended March 31, The Special 13ank Account No is maintained in United States Dollars in the name of the Ministry al Finance, Pro-ramnme of Advancement Throug I-lealth and Education No. TF iM. My examilinattion was made in accordance witli the stndards of itlie International Organisation of Suprene Audit Insiitutions (INTOSAI) and accordinglv ineluded such tests of the accounting records and other procedures I considered necessary. OriN, - SrECA. BANK ACCOUNT In my opinion. the Special Bank Account Statenient relleets ie balance in the Special Bank Account aut Nlareb 31, 2016 as well as the transactions made during the period April 1, 2015 to March in conirimity with International Public Sector Accounting Standards (IPSAS) Cash Basis. \uda G(eneral of lafnaica Date... Date

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9 IE... Programme ofadvancement Through Health & Education Jamaica Social and Economic Inclusion of Persons with Disabilities Statement of Sources and Uses of Funds For Period 1 April 2015 to 31 March 2016 Expressed in USD 4 Notes Period Ending Cumulative as Cumulative as March 31,2016 at March 31, at March 31, Sources of Funds 4 IBRD Grant Funds Received 605, , , Front-End Fee TOTAL FUNDS RECEIVED 605, , , UsesofFunds 5 GrantCategories Skills Development 217, , , Strengthening the Service Delivery of Special Education Needs to Children with Disabilities 195, , , Monitoring and Evaluation 15, , Project Administration and Management 66, , , TOTAL GRANT EXPENDITURES 494, , , Front-End Fee from IBRD Net Cash Movement 110, , , Exchange Rate Gain/(Loss) (908.25) (169.21) Cash at the Beginning of the Period 6 Main Project Bank Account Special Bank Account Cash at the End of the Period Main Project Bank Account 111, , Special Bank Account Available Cash Balance as at March 31, , , The financial statements were approved for issue by management on I., Pyy,. and signed on its behalf by: Perm nent Secr ary Project Di ctor Finantitanager

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15 Ministry of Labour and SocIal Security - Social and Economic Inclusion of Persons with Disabilities Programme of Advancement Through Health and Education (PATH) IBRD/GOJ Grant No. TF Period: April 1, 2015 to March 31, 2016 Special Bank Account Statement of Transactions - Account No NCB, Cross Roads, Kingston 5. Expressed in USD 7 USD AMOUNT IN SPECIAL BANK ACCOUNTAT APRIL 1, ADVANCE RECEIVED DURING THE PERIOD: 605, AMOUNT TRANSFERRED TO THE ADMINISTRATION BANK ACCOUNT. (605,904.38) BANK CHARGES FOR THE PERIOD (2.48) BANK CHARGES REVERSED IN THE PERIOD AMOUNT IN SPECIAL BANK ACCOUNT AT MARCH 31,

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17 Ministry of Labour and Social Security - Social and Economic Inclusion of Persons with Disabilities Programme ofadvancement Through Health & Education (PATH) IBRD/GOJ Grant No. TF Special Bank Account Activity Statement For Period April 1, 2015 to 31 March 2016 Expressed in USD 8 Bank name: National Commercial Bank (NCB) Account number: S62 Part 1 NOTE Amount 1. Accumulated advances to date. 948, Accumulated expenditures to date. (836,446.46) 3. Advance pending justification (1-2) 112, Part 2 4. Beginning balance of Designated Account 342, S. Accumulated adjustments: (Net of Interests/Charges) (14.88) 6. Advances received during the period 605, Subtotal (5+6) 605, Designated bank account activity (4+7) 948, Closing balance at the end of the period Accumulated adjustments 11. Transferred to Main Account during the period but not yet 111, documented 12. Eligible expenditures paid and justified during the period by 836, categories 13. Other(s) 14. Subtotal ( ) 948, Total (9+14) 948, Difference (8-15) (*) Forecast: Next Period Special Bank Account Ceiling 500, (*) Please provide information/explanation/details Bank charges on the DA, which have yet to be reversed (14.88) Foreign Exchange Rate Loss Total difference

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19 Ministry of Labour and Social Security - Social and Economic Inclusion of Persons with Disabilities Programme of Advancement Through Health and Education (PATH) IBRD/GOJ Grant No. TF Period: April 1, 2015 to March 31, 2016 Notes to the Financial Statements Expressed in USD 9 1. OVERVIEW The Government of Jamaica was awarded financial assistance in the form of a grant by the Japan Policy and Human Resource Development (JPHRD) Technical Assistance Program. The grant is being administered by the International Bank for Reconstruction and Development (IBRD). The Grant proceed is USD 2.8 Million. The objective of the project is to assist the Ministry of Labour and Social Security (MLSS) to increase the employability and skills development of persons with disabilities living below the poverty line, and improve the service delivery of special education needs to poor children with disabilities. PROJECT COMPONENTS The Social and Economic Inclusion of Persons with Disabilities Project consists of four (4) parts: 1. Skills Development of Persons with Disabilities This component will develop the skills of persons with disabilities through provision of technical assistance including: 1. Conducting a labour market study; 11. Assessing training providers and organisations; and Ill. Implementing skills or entrepreneurial training activities for persons with disabilities. 2. Strengthening the Service Delivery of Special Education Needs to Children with Disabilities Strengthening the service delivery of special education needs to children with disabilities including:

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21 Ministry of Labour and Social Security - Social and Economic Inclusion of Persons with Disabilities Programme ofadvancement Through Health & Education (PATH) IBRD/GOJ Grant No. TF Notes to the Financial Statements For Period April 1, 2015 to 31 March 2016 Expressed in USD Strengthening the Service Delivery of Special Education Needs to Children with Disabilities (contd.) i. Delivery of special expertise on child development, physiotherapy, behaviour modification and speech therapy; ii. Providing equipment and tools, such as adaptive aids, hearing aids, glasses, wheelchairs and special chairs for improved service to beneficiaries; iii. Improving access to Early Stimulation Centres for people with disabilities; iv. Building capacity in child development, child therapy and curriculum development; v. Delivering rehabilitative therapy sessions; and vi. Training and workshops for stakeholders and parents of children with disabilities. 4. Monitoring and Evaluation Monitoring and evaluating Project activities, including: i. Baseline and endline surveys; ii. Development of a management information system module for tracking beneficiaries' employment and improvement in school readiness for children in place; and iii. Outcome evaluations. 5. Project Administration and Management Project Administration and Management comprise carrying out project management and implementation support.

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23 Ministry of Labour and Social Security - Social and Economic Inclusion of Persons with Disabilities Programme ofadvancement Through Health & Education (PATH) IBRD/GO] Grant No. TF Notes to the Financial Statements For Period April 1, 2015 to 31 March 2016 Expressed in USD 11 MANAGEMENT REPORT The Annual Report is submitted by management for the Programme of Advancement Through Health and Education (PATH) for the period August 2013 to year ended March 31, AUDITING OF THE PROJECT The Project is audited by the Auditor General's Department. The Auditors, Auditor General's Department, 40 Knutsford Boulevard, Kingston 5, Jamaica. 2. The Budget This is the amount allocated for the financial year in accordance with the Grant Agreement. 3. Summary of Accounting Policies i. Basis of Preparation The Project Accounting Unit (PAU) uses the International Public Sector Accounting Standards (IPSAS) cash basis of accounting to account for the project's transactions. Under this basis, income is recognized when funds are received rather than when requested and expenses are recognized when payment is made rather than when obligations are incurred. Since the main objective of these financial statements is to disclose the sources and uses of funds, it is not necessary to present information adjusted for inflation. ii. Recording of Transactions Transactions are entered in local currency. However, transactions are converted for preparation of the financial statements. Receipt and expenditure in local currency are translated into US dollars, by applying the commercial bank rate at which the disbursement was received.

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25 Ministry of Labour and Social Security - Social and Economic Inclusion of Persons with Disabilities Programme ofadvancement Through Health & Education (PATH) IBRD/GO) Grant No. TF014Z58 Notes to the Financial Statements For Period April 1, 2015 to 31 March 2016 Expressed in USD Summary of Accounting Policies (cont'd.) iii. Foreign exchange fluctuation and bank charges All bank fees and charges for un-disbursed grant funds, as well as losses due to exchange rate fluctuations are not considered eligible project costs and are absorbed by the Government of Jamaica at the close out of the project. iv. Equipment and other fixed assets Equipment and other fixed assets acquired with project resources are recorded at their acquisition cost at the date of purchase. Depreciation is not charged on these assets and is also not reflected in these financial statements. v. Exchange Rate for the period Expenses paid from the Jamaican dollar project account held with National Commercial Bank, were converted by applying the exchange rate at which the commercial bank transferred funds from the special bank account to the local administrative bank account. 4. Source of Funds The amount of USD.606 Million (cumulatively USD.949 Million) was received from the World Bank for the period under review. Application Date of application USS Application# 5 MAY , Application# 6 JULY , Application# 7 DECEMBER , Application# 8 MARCH , , S. Use of Grant Funding The project invested US$0.495 million during this period and the cumulative investment amounted to US$0.836 million.

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27 Ministry of Labour and Social Security - Social and Economic Inclusion of Persons with Disabilities Programme ofadvancement Through Health & Education (PATH) IBRD/GOJ Grant No. TFOI 4258 Notes to the Financial Statements For Period April 1, 2015 to 31 March 2016 Expressed in USD Cash at the beginning of the period This represents the cash balances brought forward for Special Bank Account Number and Project Administration Bank Account Number Also, the balance brought forward for the net foreign exchange rate loss or gain on transactions during the period (USS) 2015(USS) Main Project Bank Account Special Bank Account Cash at the end of the period This represents the cash balances at the end of the period for the Special Bank Account Number and Project Administrative Bank Account Number Also the balance brought forward for the net foreign exchange rate loss or gain US$ (2015, US$(908.25) on transactions during the period US$) 2015(uSS) Main Project Bank Account 111, Special Bank Account , Special Bank Account Activity Statement I. Accumulated advance This represents the total advance issued by the IBRD for the period ending March 31, ADVANCES RECEIVED DURING THE PERIOD: MAY 2015 Application# JULY 2015 Application# 4 254, DECEMBER 2015 Application# 6 97, MARCH 2016 Application# 7A 166, ,905.28

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29 Ministry oflabour and Social Security - Social and Economic Inclusion of Persons with Disabilities Programme ofadvancement Through Health & Education (PATH) IBRD/GO] Grant No. TF Notes to the Financial Statements For Period April 1, 2015 to 31 March 2016 Expressed in USD 15 DISTRIBUTION OF GRIANT FUNDS DISBURSED im.v ll uw- k-:111 idi j~1.111 P ::il %kiltmilr!. De'velopment of, Graph 1 From the Grant amount of 2.897M, the Bank has disbursed 31% as at March 31, 2016.

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31 Ministry oflabour and Social Security - Social and Economic Inclusion of Persons with Disabilities Programme ofadvancement Through Health & Education (PATH) IBRD/GOJ Grant No. TF Notes to the Financial Statements For Period April 1, 2015 to 31 March 2016 Expressed in USD 16 Overall Budget vs Expenditure 1.40O as0 0los ,20 ) -l 0.I ) 02 part I Skill Part of tpngthening wit: Pa;t Il;: M om n DevPlopm S ten the Service Delivery and Evaluation Part Project Admin s:ation and pergonis withl ol Speciil Education Mari..:ne rnt Diabltes Needs to ChIidren PrI sa A hti n e SEI Components ai x)pendtiltur U. Of Graph 2 The percentages of the budgeted grant utilized by each component to date are as follows: Part 1. Skills Development of Persons with Disabilities; 29% Part ll. Strengthening the Service Delivery of Special Education Needs to Children with Disabilities; 27% Part 111: Monitoring and Evaluation; and 6% Part IV: Project Administration and Management. 65%

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33 17 AUDITOR GENERAL'S DEPARTMENT 40 KNUTSFORD BOULEVARD P.O. BOX 455 KINGSTON 5 JAMAICA Tel No e Fax Number; audgen5@cjamaica.com GOJ/IBRD GRANT AGREEMENT No. TF JM Promramme of Advancement Through Health and Education (PATH) Jamaica Social and Economic Inclusion of Persons with Disabilities Project (JSEPD) Period April 1, March 31, 2016 AUDIT OF STATEMENTS OF EXPENDITURE (SOE) PROCEDURES In the course of the Audit of the Programme of Advancement through Health and Education (PATH) Jamaica Social and Economic Inclusion of Persons with Disabilities Project (JSEIPD) for the period ended March 31, 2016, 1 examined the following statements of expenditure submitted to the IBRD during the financial year under review in support of applications for advance of funds from the Grant Account in accordance with the Grant Agreement: Application Date Advanced Amount (USs Number 3 May 5, , August 13, , December 21, December 22, , A March 29, , Total 05,28 The examination was done in accordance with generally accepted auditing standards and procedures prescribed by INTOSAI and accordingly, included such tests as the verification of the internal control systems and of the accounting records, tests of the origin and eligibility of expenditures, certification and procurement procedures for goods and services, filing of supporting documents and such other auditing procedures as I considered necessary in the circumstances. Opinion In my opinion, the statements of expenditure and the annexes submitted in support of them, together with the internal controls procedures used in their preparation can be relied upon to support the applications for advance in conforming to the requirements of the Grant Agreement. Auditor General of Jamaica Date

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