AUDIT OF FINANCIAL STATEMENTS FOR THE REVITALISING EDUCATION DEVELOPMENT IN SIRRA LEONE (REDISL) PROJECT FOR THE YEAR ENDED 31 DECEMBER 2017

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized AUDIT OF FINANCIAL STATEMENTS FOR THE REVITALISING EDUCATION DEVELOPMENT IN SIRRA LEONE (REDISL) PROJECT FOR THE YEAR ENDED 31 DECEMBER 2017 Public Disclosure Authorized

2 evitalising Education levelopment in Sierra Leone (REliSL) Project Ministry of Education, Science and Technology Financial Statements for the year ended 3f t lecember 217 Contents Page General Information 1 Statement of Management's Responsibilities 2 Report of the Auditors 3-5 Consolidated Statement of Resources and Expenditure (GPEF & MDTF) 6 Statement of Resources and Expenditure (GPE Funding) 7 Statement of Resources and Expenditure (MDTF) 8 Statement of Comprehensive Income 9 Statement of Financial Position 10 Statement of Cash Flows 11 Notes to the Financial Statements Report of the Auditors on the Special Account Statement (GPE) Report of the Auditors on the Special Account Statement (MDTF) 19-20

3 lrevitalising Education Development in Sierra Leone (REDiSL) Project Ministry of Education, Science and Technology.SR LONE Financial Statements for the year ended 3f December 217 GENERAL INFORMATION Official Address Revitalizing Education Development in Sierra Leone (REDiSL) Project New England Ville, Brookfield's Freetown Project Coordinator Mr. Reginald C. King Bankers Sierra Leone Commercial Bank Siaka Steven Street, Freetown Auditors Audit Service Sierra Leone 2 nd Floor, Lotto Building Tower Hill Freetown Sierra Leone 1

4 .IERRA [N fievitalising Education levelopment in Sierra Loone (REliSL) Project Mlinistry of Education, Science and Technology Financial Statements for the year ended 37 lecember28/7 STATEMENT OF MANAGEMENT'S RESPONSIBILITIES It is the responsibility of management to prepare Financial Statements for each financial year which should show a true and fair view of the state of affairs of the Project and of its surplus or deficit for that year. In preparing these Financial Statements the Management is required to: * select suitable accounting policies and apply them consistently; * make judgments and estimates that are reasonable and prudent; * state whether applicable accounting policies have been followed, subject to any material departures disclosed and explained in the Financial Statement; * prepare the Financial Statements on a going concern basis unless it is inappropriate to presume that the Project will continue its activities Management is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Project. They have a general responsibility for such steps as are reasonably available to them to safeguard the assets of the Project and to prevent and detect fraud and other irregularities. On behalf of Management PermaneulSecretary - Ministry of Education, Science and Technology... j) Project Coordinator 2

5 Ly ^Revitailsing Education levelopment in Sierra Leone (REliSL) Project MiNstry of Education Science and Technology SA RR LUNIE Financi./Statements fr the year E7dE 3[ ecember2 17 Audit of the Revitalising Education Development in Sierra Leone performed by the Auditor General Addressee: The Projec Coordinator Date: Dear Sir Unqualified Opinion I have audited the financial statements of the Revitalising lducation Development in Sierra Leone for the year ended 3/" Dect7ember, These financial statements comprise a consolidaied state'ment ofresounc Ind eape1dilre,'feparate slalen of reounres and pajyients (y /nnding cgnq) statmntn ofompreh;ensie income, tatemntif of financia/ position and cash flow statemeni for the year then ended, and a summary of significant accounting policies and other explanatory information as set out on pages 12 to 16. In my opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Revitalising Iducation Development in Sierra Leone as at 311 December, Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Those charged with governance are responsible of overseeing the entity's financial reporting process. Auditor's Responsibility for the Audit of the Financial Statements MY objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditor's report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards for Supreme Audit Institutions will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with International Standards for Supreme Audit Institutions, I exercise professional scepticism throughout the audit. I also: 3

6 Revitalising Education levealopment in Sierra Leone (REliSL) Project Ministry ofeducation, Science and Technology SI LA FinndStatements for the year ended 3, lecember2fl/7 * Identify and assess the risks of material misstatemcent 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 controls. * Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Etntity's internal control. * E'valuate the appropriateness of accounting policies uses and the reasonableness of accounting estimates and related disclosures made by management. * Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence, obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity's ability to continue as a going conce3rn. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor's report to the related disclosures in the financial statements or, if su8ch disclosures are inadequate, to modify my opinion. MY conclusions are based on the audit evidence obtained up to the date of my auditor's report. I lowever, future events or conditions ma, cause the Entity to cease to continue as a going concern. * Evaluate the overall presentation, structure and content of the financial statements, includiig 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 an significant deficiencies in internal control that I identify during my audit. I also provide those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other riatters that mav reasonably be thought to bear on my independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor's report unless law or regulation precludes public disclosure about the matter or, when, in extremely rare circumstances, I determine that a matter should not 4

7 Revitalisfng Education OevEIopmEnt in SiErra Lene (REiSL) Pr8ject I q- Ministry of Education, Science and Techno/ugy IMA i~l ohlf,ia1cisistatements for the year ended 3f' lecember 2/7 be communin cted irm report because the adverse con-sequenices of doing so would reasonably be cxpected to outweigh the public interest benefits of such communleation. AUDI ENERAL Date: T 5

8 R9e vitalishg Education levelopment /i Sierra Leone (REliS) Pr6ojt Ministry of Education Science and Technology IRRAU177E FinancialStatements for the year ended 37' flecember 2017 CONSOLIDATED STATEMENT OF RESOURCES AND EXPENDITURE (GPEF & MDTF) Note USS Opening Bank USS Balance: GPE 1,720, MDTF 815, ,524 PBF 25,582 Advance _ 402,805 Resources: 2,561,549 1,337,885 Receipts into IDA Special Account - GPE 10,224,929 3,053,511 Receipts into IDA Special Account - MDTF 1, ,782 Receipts into IDA Special Account - PBF 2,433, ,134 Bank interest 329 1,929 13,753,371 3,997,357 Expenditures: Improving Learning Environment - School Grant 9,737, ,553 Improving Learning Environment 3,084,242 1,290,714 Driving and Monitoring the ESP Implementation - 861,681 Project Management and Monitoring 389, ,969 Supporting the implementation of Ebola Response Plan 1.734,866-14,945,328 2,687,917 Closing balance 1,369,592 2,647,324 Represented by: IDA Special Account - GPE 266,656 1,720,833 IDA Special Account - MDTF 425, IDA Special Account - PBF 677,177 25,582 Advances These Financial Statements were approved on ,775 1,369,592 2,647,324.. Peanent Secretary - Ministry of Education, Science an(d Technology Project Coordinator 6

9 Re vitalsing Education Development in Sierra Leone (REiL) Project Hinistry of Education, Science and Technology itra LA Financial/Statements for the year ended 3r lecember20/7 STATEMENT OF RESOURCES AND EXPENDITURE (GPE Funding) USS USs$ Opening Bank Balance:GPE Funding 1,720, ,556 Opening Bank Balance: School Grant 25,582 Resources: Receipts into IDA Special Account 10,224,929 3,053,511 Receipts into IDA Special Account - School Grant 2,433, ,134 Bank interest 212 1,449 12,658,775 3,387,094 Expenditures: Improving Learning Environment 9,737,209 1,290,714 Improving Learning Environment - School Grant 1,782, ,552 Strengthen education service delivery 833,292 Project Management and Monitoring ,969 Supporting the implementation of Ebola Response Plan 290,672 13,032,387 1,826,235 - Closing Balance 1,372,803 1,746,415 Refund to MDTF for transactions wrongly classified (428,970) Adjusted closing balance 943,833 1,746,415 Represented by: IDA Special Account - GPE 266,656 1,720,833 IDA Special Account - School Grant 677,177 25, ,833 1,746,415 7

10 1ev/talsing Education levelopment in Sierra Leone (1El/SI) Project Ministry of Education, SCIEnce and Technology FinancialStatements for the yea?r eld t3 EcembLr7g17 SAE e LAN STATEMENT OF RESOURCES AND EXPENDITURE (MDTF Funding) USS US S Opening Bank Balance: ,152,328 Resources: Receipts into IDA Special Account 1.094, ,782 Bank interest ,094,596 1,762,590 Expenditures: Project Management and Monitoring Driving and Monitoring the ESP Implementation 468, ,681 Supporting the implementation of Ebola Response Plan 1,444,194-1,912, ,681 Closing Balance (3,211) 900,909 Funds received from GPE for wrongly classified expenses 428,970. Adjusted closing balance 425, ,909 Represented by: IDA Special Account 425, Advances - 85, , ,909 8

11 Revitalsing Education levelopment in Sierra Leone (RElil) Project S E A L. AiNistry of Education, Science and Technology be Financi/alStatements for the year ended 3f' lecember 2I/7 STATEMENT OF COMPREHENSIVE INCOME Income USS US S Funding from Donors 3 14,945,328 2,687,916 14,945,328 2,687,916 Expenditure Project Management and Monitoring 13,210,462 Fbola Response 1,734,866 (2,687,916) 14,945,328 (2,687,916) Results for the period Nil Nil 9

12 levitalising Education levelopment in Sierra Leone (ielisl) Project Ministry of Education, Science and Technology SIBRA NI FinancialStatements for the year Ended 30 ECEmbr 217 STATEMENT OF FINANCIAL POSITION Notes Assets us S US S Cash and cash equivalents 4 1,369,592 2,561,549 Advances - 85,775 1,369,592 2,647,324 Funding and Liabilities Deferred income 3 1,369,592 2,647,324 These Financial Statements were approved on Permanent Secretary - Ministry of Education, Science and Technology.... Project Coordinator 10

13 Revitaising Education lovelopment in Sierra Leone (REliSL) Project Miistry of Education, Science and Technology L.OR Financia/ Statements for the year ended 37 lecember 2017 STATEMENT OF CASH FLOWS Notes uss uss Operating activities Cash paid to suppliers and employees 5 (14,945,328) (2,370,886) Cash flows from operating activities 14,945,328 2,370,886) Financing activities Funding received 3 13,753,370 3,997,356 Cash flows from financing activities 13,753,370 3,997,356 Net increase in cash and cash equivalent (1,191,958) 1,626,470 Cash and Cash equivalent at the start of the 2,561, ,080 year Cash and cash equivalent at the end of the year 4 1,369,592 2,561,550 11

14 R9evitolising Education e velopment in Sierra Leone (RElil) Project Hinistry of Education Science and Technology SAPRA LOKI FinancialStatements for the yearended 3'Ceember 217 NOTES TO THE FINANCIAL STATEMENTS 1. BACKGROUND The REDiSL (Revitalising Educational Development in Sierra Leone) project, supported by the Global Partnership for Education (GPE) and DFID through the World Bank, aims to support the Government of Sierra Leone, through the Ministry of Education, Science and Technology (MEST) to implement many, though not all, of the components of the Education Sector Plan (ESP) It is assumed that the Government of Sierra Leone, with other partners, will implement other aspects of the ESP The main components of the ESP being supported by the REDiSL project are as follows: Component I Sub Component 1.1. Sub Component 1.2. Sub Component 1.3. Component 2 Sub Component Sub Component 2.2. Sub Component 2.3. Sub Component 2.4. Improving the learning environment and opportunities in Targeted areas (USD 11.9 million) Performance-based School Grants: Piloting approaches to increase school readiness Strengthening reading outcomes at early grades Strengthen education service delivery (USD 8.9 million) Improvements in teacher management - The Teaching Service Commission Act Building the foundation for better measurement of learning Outcomes Robust consistent school data collection Establishing a system for driving and monitoring the Implementation of the Education Sector Strategy - The Change Unit (CU) Component 3 Unallocated Grant Project Management and Supervision - Establishment of the REDiSL Secretariat (USD 0.9 million) (USD 1.45 million) 12

15 Revitalising Education le velopment in Sierra Leone (REiSL) Project MNIstry of Education, Science and Technology SIBR LEOFinancial Statements for the year e7ded 3f terember 20/7 NOTES TO THE FINANCIAL STATEMENTS (Continued) Whilst the REDISL project will only support some of the components of the ESP, it is important that structures created by the REDISL project are not only supportive of the overall implementation of the ESP. but also accommodative of the other donor partners who may wish to engage on some of the other components. It will continue to maximize the use of existing government structures, including the existing Inter-Governmental Fiscal Transfers system (lfts) 2. PRINCIPAL ACCOUNTING POLICIES The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Project's financial statement. a. Basis of accounting Statement of resources and expenditure are prepared on the basis of cash accounting whereby income is recognised on the receipt of cash and cash equivalents is recognised on the disbursement of cash and cash equivalents. The project financial statements have been prepared using the modified cash basis in line with the project financial reporting terms of reference. The basis of the income recognition is described in note (d) below.. b. Foreign currency transaction Functional and presentation currency The functional currency is the local currency in Sierra Leone which is the Leone. The Project has however adopted the United States Dollars (US$) as its presentation currency as most of it transactions are dominated in US Dollars. Transactions in all other currencies are therefore considered foreign currency transactions. 13

16 SIRRA LA RevitaliSig Education levelopment in Sierra Leone (EliSL) Profjct Hinistry of Education, SciEnce and Technology FinancialStatements for the year ended 37 December 2fI7 NOTES TO THE FINANCIAL STATEMENTS (Continued) Transactions and balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing on the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions denominated in foreign currencies are recognized in the Project's Statement of Comprehensive Income. c. Non-current assets Plant and equipment are expensed on acquisition by the Co-ordinating Unit. The financial statements therefore have no non-current assets shown. d. Income Funding from the World Bank is held in a deferred income account when received and only recognised in the Project's Statement of Comprehensive Income when utilised. 14

17 Revitaising Education levelopment i7 Sierra Leone (REliS1) Project Ministry of Education, Science and Technology SA LO[E FinancialStatements for the year ended 3f' lecember 2?I7 NOTES TO THE FINANCIAL STATEMENTS (Continued) - 3 Deferred income Opening balances - GPE 1,720, ,556 MDTF 815,134 PBF ,152,328 Funding received - GPE 10,224,929 3,053,511 MDTF 1,094, ,782 PBF 2,433, ,134 Interest Income 329 1,929 16,314,920 5,335,240 Utilized during the year (14,945,328) (2,687,916) Adjusted balance as at 31 December 1,369,592 2,647,324 Represented By: Cash and cash equivalent 1, ,561,549 Advances - 85,775 1,369,592 2,647,324 4 Cash and Cash Equivalent IDA Special Account - GPE 266,656 1,720,833 IDA Special Account - MDTF 425, ,134 IDA Special Account - PBF 677,177 25,582 1,369,592 2,561,549 5 Cash paid to suppliers and employees Total 'xpenditure 14,945,328 2, Increase/ (decrease) in Advances - (317,030) 14,945,328 2,370,886-6 Bank Interest GPE 48 1,449 MDTF PBF ,929 15

18 1evitalising Education le velopment in Sierra Leone (REliSL) Project Ministry of Education, Science and Technology SEA LAE Financial Statements for the year ended 3f t lecember 217 NOTES TO THE FINANCIAL STATEMENTS (Continued) 7 Disbursement Total Grants Receivable (GPE/MDTF) 23,400,000 23,400,000 Total amount disbursed 21,314,561 8,114,278 Amount yet to be disbursed 2,085,439 15,285,722 Disbursement During the year WA/GPE?SG/A/ ,134 WA/GPE/A/003 3,053,511 WA/MDTF/ ,783 WA/GPF/SG/A/ ,584 WA/GPE/A/006A 4,035,063 WA/GPE/A/005 6,189,896 WA/GPF/SG/A/002 2,116,080 WA/ERRTF/A/ ,985 WA/MDTF/A/ ,494 13,753,101 3,995,428 16

19 Revitalisyig Education flevelopment in Sierra Leone (RliSL) Project Ministry of Education, Science and Technology SI [ W [ Financia/lStatements for the year ended 3' December 2017 REPORT OF THE AUDITORS ON THE SPECIAL ACCOUNT STATEMENT, US DOLLLAR ACCOUNT NUMBER have audited the accompanying Special Account numbered with the Sierra Leone Commercial Bank established under the provision of' the International Development Association (IDA) acting as administrator of the Global Partnership for Education Fund (GPEF) Grant Number: TF for the year ended 3I't December 2017 as set out on page 18. I conducted the audit in accordance with the Standards of the International Organization of Supreme Audit Institutions (INTOSAI) and International Federation of Accountants (IFAC). Those Standards require that I plan and perform the audit to obtain reasonable assurance that the Special Account statements are free of material misstatement. The accompanying Special Account Statement was prepared on the basis of cash deposited and withdrawals for the purpose of complying with the project agreement. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Opinion In my opinion the receipts are properly accounted for and the withdrawals were made for the purpose of the project in accordance with the Loan/Grant agreement and IDA disbursement procedures. The accompanying special account statement give a true and fair view of the ending balance for the year ended 3 1 December In accordance with the provisions of the terms of reference of the audit, I confirm as follows: * Withdrawals from the Special Account during the period under review were made for eligible expenditure. * The Special Account of the project has been maintained in accordance with the provisions of the financing agreement; &. AUDITOR GENERAL Date oj1 17

20 - frevitaliskg Education levelopment i Sierra Leone (REliSL) Project Mlinistry of Education, Science and Technology S11RA LAI Financial Statements for the year ended 3f eember 2017 SPECIAL ACCOUNT STATEMENT Account No: Depository Bank Sierra Leone Commercial Bank Address: Siaka Stevens, Freetown Sierra Leone Related Grant Agreement: GPFF Grant Number TF Currency: United States Dollars Part A- Account Activity US$ US$ Initial Deposit Opening Balance : GPE 1,720, ,556 Opening Balance : School Grant 25,582 Replenishment 12,658,563 3,385,645 Bank Interest 212 1,449 Project Payments (13,032,387) (1,826,235) Refund to MDTF for transactions (428,970) wrongly classified Closing Balance 943,833 1,746,415 18

21 Rievitel/sing Education levelopment in Sierru Leone (REliSI) Project Ministry of Education, Science and Technology S IRRA I UK financi/statements for the year ended 3f t ecember 2I17 REPORT OF THE AUDITORS ON THE SPECIAL ACCOUNT STATEMENT, US DOLLLAR ACCOUNT NUMBER have audited the accompanying Special Account numbered with the Sierra Leone Commercial Bank established under the provision of the International Development Association (IDA) acting as administrator of the Multi-Donor Trust Fund (MDTF) Grant Number: TF for the year ended 31t December 2017 as set out on page 20. I conducted the audit in accordance with the Standards of the International Organization of Supreme Audit Institutions (INTOSAI) and International Federation of Accountants (IFAC). Those Standards require that I plan and perform the audit to obtain reasonable assurance that the Special Account statements are free of material misstatement. The accompanying Special Account Statement was prepared on the basis of cash deposited and withdrawals for the purpose of complying with the project agreement. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Opinion In my opinion the receipts are properly accounted for and the withdrawals were made for the purpose of the project in accordance with the Loan/Grant agreement and IDA disbursement procedures. The accompanying special account statement give a true and fair view of the ending balance for the year ended 31 " December In accordance with the provisions of the terms of reference of the audit, I confirm as follows: * Withdrawals from the Special Account during the period under review were made for eligible expenditure. * The Special Account of the project has been maintained in accordance with the provisions of the financing agreement; AUDITOR GENERAL Date1 19

22 - Revitalising Education Development In Sierra Leone (RElif0) Project Ministry of Education, Science and Technology FinancialStatements for the year ended 37 December 217 SPECIAL ACCOUNT STATEMENT Account No: Depository Bank Sierra Leone Commercial Bank Address: Siaka Stevens, Freetown Sierra Leone Related Grant Agreement: MDTF Grant Number: TFO17720 Currency: United States Dollars Part A- Account Activity Notes S S Initial Deposit Opening Balance 815,134 1,152,329 Replenishment 1,094, ,782 Bank Interest Project Payments (1,912,941) (861,681) Cash advances (85,775) Refund from GPE for transactions 428,970 wrongly classified Closing Balance 425, ,134 20