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1 Public Disclosure Authorized AUDITO EVES OFFICE PAPUA NEW GUINEA Sr Phone: (+675) Fax: (+675) Website: www,ago.gov.pg Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized The H1onotrable Leo Dion, MP Deputy Prime Minister & Minister for Inter-Government Relations Office ofthe Minister PO Parliament Haus WAIGANI, NCD - SCOPE OF AUDIT AUDIT CERTIFICATE URBAN YOUTH EMPLOYMENT PROJECT IDA (WORLD BANK) CREDIT NO. (4854-PNG) & MDTF (WORLD BANK) GRANT NO. TF0A1282 FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 Our Reference: I have audited the accompanying financial statements of Urban Youth Employment Project IDA (World Bank) Credit No PNG and MDTF (World Bank) Grant No. TFOA1282 as at 31 December, The preparation of this Project's financial statements is the responsibility of the Prqject Management. My responsibility is to express an opiion on these financial statements based on my audit. I have conducted my audit in accordance with International Standard on Auditing as adopted by the Accounting Standards Board of Papua New Guinea and the requirements of the Public Finances (AManagement) Act, These standards require that I plan and perform the audit to obtain reasonable assurance whether the Financial Statements are free of material misstatement. The audit procedures include examination, on a test basis, of evidence supporting the amounts and disclosures in the Financial Statements. My audit also included assessing the accounting principles applied and significant accounting estimates made by management, as well as evaluating the overall statements presentation. I believe that my audit provides a reasonable basis for my opinion. The policy of the Management of Project is to prepare the accompanying statements in accordance with International Accounting Standards as adopted by Accounting Standards Board of Papua Neii Guinea and the requirements of the World Bank Credit Facility Credit No. (4854-PNG) Agreement daued 31 March, 2011 and Grant No. (TF0,A1282) Agreement dued 22" January Level 6 PO Box 423 TISA Investment Haus JVedal WAIGANI, NCD Kumul Avenue, NCD

2 Audit Report on the Accouints and Records for Urban Yonth Emiployment Project for the Year ended 31 December 2016 UNQUALIFIED AUDIT OPINION In my opinion, the aforementioned Project Financial Statements give a true and fair view in all material respect, of the-financial position of the Urban Youth Employment Project IDA (World Bank) Credit No. (4854-PG) and MDTF (World Bank) Grant No. (TF0A 1282) as at 31 December, 2016 and the statement of revenue and expenses and the acquisition of assets are in accordance with the Public Finances (Management) Act, 1995 (as amended). In addition: (a) (b) With respect to disbursement by the World Bank paid on the basis of Certified Statements of Expenditure, adequate supporting documentations had been maintained to support the claims to the World Bank for reimbursements of expenditure inclirred and the expenditure concerned are eligible for financing under the IDA (World Bank) Credit Facility No. (4854-PG) and MIDF (World Bank) Grant No. (TF0Al282), and The IDA Imprest Account and the MDTF Imnprest Account give a true and fair view of the receipts collected and payments made during the year and the status of the kinprest Accounts as at 31 December, PHILIP NAU Auditor-General 28 Jime, 2017 Paqe 24of2

3 URBAN YOUTH EMPLOMENT PROJECT FINANCIAL STATEMENTS CONTENTS Pae No. Management's Declaration 2 Statement of Receipts and Expenditure 3 Balance Sheet 4 Cash Flow Statement 5 Notes to and forming part of the accounts 6-8 Detailed Statement of Receipts & Expenditure 9 Statement of Source and Uses of Funds (in World Bank format) 10

4 URBAN YOUTH EMPLOMENT PROJECT FINANCIAL STATEMENTS MANAGEMENT'S DECLARATION The Project Management is responsible for the preparation of the Financial Statements of the NCDC Urban Youth Employment Project. Establishment and principle activities The NCDC Urban Youth Project was established under the loan arrangment with the World Bank with an initial grant from the Korean Bank to carry out research into the social and life patterns of urban youth and possibly find a way to have them meaningfully participate in development and find employment. The project's development objectives are to provide disadvantaged urban youths with income from temporary employment opportunities and to increase their employability. The principal activities are conducting Basic Life Skills Training (BLST), Pre-employment Training (PET), Public Works program (YJC) and On the Job Training (OJT) for the disadvantage youths. Due to its successful implementation the project was provided additional financing in the form of a grant by Australian government through the World Bank in March 2016 to continue with its core develpoment objectives. Results The net operating surplus for the year was K3,115,354 (2015: K903,057) Manaeement's Declaration In our opinion proper accounting records have been kept in the year to 31 December 2016 and the attached financial reports including Sources and Use of Funds Statement has been drawn up to reflect the finanacial performance and position for the Urban Youth Employment Project for the year ended 31 December, For and on behalf of the Management, T GIL PROJECT MANAGER DCM CORPORATE SERVICES - NCDC Dated at.... This.,... day of..-am AIe2017 Page 2 of 10

5 FINANCIAL STATEMENTS FOR URBAN YOUTH EMPLOMENT PROJECT STATEMENT OF RECEIPTS AND EXPENDITURE Notes K K TOTAL RECEIPTS ,469 11,430,889 LESS: EXPENDITURE Civil works 30) ,783,189 Consultancy 3(ii) ,483,682 Stipends 3(ii) 4, ,735,281 Training 3(vi) 652, ,238 Goods 3(iv) 1.330, ,463 Operating costs 3(v) ,455 15,131,169 11, NET BALANCE BEFORE OPENING BALANCE 2.212,300 (400,419) Add: Adjustment for GST reimbursement 3(vii) -. ADD: Opening Cash Balance ,303,476 NET SURPLUS/(DEFICIT) AFTER OPENING BALANCE ,056 This statement is to be read in conjunction with the notes on pages 6 to 8 0 Page 3 of 10

6 FINANCIAL STATEMENTS FOR URBAN YOUTH EMPLOMENT PROJECT BALANCE SHEET ASSETS Notes K K NON-CURRENT ASSETS Property, Plant and Equipmen 1B.(iii) 4,050,251 2,719,800 Total Non-current Assets ,719,800 CURRENT ASSETS Cash at bank IB.(vi) 3,115, ,056 Total Current Assets 3,115, ,056 TOTAL ASSETS 7,165,605 3,622,856 LIABILITIES CURRENT LIABILITIES Fund Balances IB.(v) ,622,856 Total Current Liabilities ,622,856 TOTAL LIABILITIES 7, ,856 For and on behalf of the Management, TOM ILLS PI 10 KALUS PROJECT MANAGER D M CORPORATE SERVICES - NCDC This balance sheet is to be read in conjunction with the notes on pages 6 to 8 Page 4 of 10 9 l PV

7 FINANCIAL STATEMENTS FOR URBAN YOUTH EMPLOMENT PROJECT CASH FLOW STATEMENT Notes K K Cash flows from operating activities Cash receipts from donors ,430,889 Payments to suppliers (15.131,169) (11,831,308) Net cash flow from operating activities (400,419) Cash flows from investing activities Purchase of property, plant & equipment Proceeds from assets Net cash flow from investing activities Cash flows from financing activities Proceeds from other shareholder loans Loans to shareholders Net cash flow from financing activities Net cash flow during the year 2, (400,419) Cash at the beginning of the year ,303,476 Adjustment for OST reimbursement 3(vii) - - Cash at the end of the year 3, ,057 Reconciliation of cash For the purpose of the statemen of cash flows, cash includes cash on hand and in banks and investments in money market instruments. Cash at the end of the year as shown in the slatement of cash flows is reconciled to the related items in the balance sheet as follows:- Cash on hand Cash at Bank 3, , ,056 This cash flow statement is to be read in conjunction with the notes on pages 6 to 8 P o Page 5 of itt

8 FINANCIAL STATEMENT FOR URBAN YOUTH EMPLOMENT PROJECT NOTES TO AND FORMING PART OF THE ACCOUNTS 1 STATEMENT OF ACCOUNTING POLICIES These financial statements are presented in accordance with the applicable financial reporting standards approved for use in Papua New Guinea by the Accountants Standards Board. Unless otherwise stated. all policies stated herein are adopled in line with acceptable rules and best practices. A. Basis of preparation The fundamental accounting assumptions recognized as appropriate for the measurement and reporting of results, cash flows and the financial position been followed in preparation of these financial statements. The cash accounting policy has been adopted in the preparation of these accounts. (i) Statement of Source and Uses of Funds for the year Statement of Source and Uses of Funds for the year (being the World Bank IFR formal) is included at the request of the client. B. PARTICULAR ACCOUNTING POLICIES The following particular accounting policies which significantly affect the measurement of surplus/deficit and of financial position, have been applied. (i) Going Concern The accounts have been prepared on the basis of the continuation of project as a going concern. This is dependent upon the terms of funding agreement with the World Bank and Government of PNG. (ii) Revenue The preparation of financial statements, in accordance with the IFRS, requires management to make estimates and assumptions that affect the amounts reported in the financial statements. The financial statements relates to drawdowns or replenishments of withdrawal applications lodged and approved by the World Bank during the year. (iii) Property, Plant and Equipment The cost of purchased fixed assets is the value of the consideration given to acquire the assets and the value of other directly attributable costs which have been incurred in bringing the assets to the location and conditions necessary for their intended service. (iv) Depreciation and Amortization Depreciation and amortization are not applied to property, plant, equipment and furnitures due to cash basis accounting. (v) Fund Balance Fund balance relates to equivalent of cost of total assets that may be due to the donor or otherwise, governed by the Agreement on the disposal of the assets. Page 6 of 10

9 FINANCIAL STATEMENTS FOR URBAN YOUTH EMPLOMENT PROJECT NOTES TO AND FORMING PART OF THE ACCOUNTS 1 STATEMENT OF ACCOUNT POLICIES (Continued) (vi) Cash For the purpose of the statement of cash flows, cash is considered to be cash on hand and current accounts in banks, net of bank overdrafts. (vii) Currency Unless otherwise stated monetary items are stated in Papua New Guinea Kina (viii) Comparatives Where necessary, the figures for the previous period have been included to facilitate comparison. 2 REVENUE K K Receipts from World Bank (IDA) ,430,889 Receipts from World Bank (MDTF) 13,123,579 - Receipts from GoPNG 3,000,000 - Receipts from Korean Fund Grants ,430,889 Page 7 of 10

10 FINANCIAL STATEMENTS FOR URBAN YOUTH EMPLOMENT PROJECT NOTES TO AND FORMING PART OF THE ACCOUNTS 3 EXPENDITURES BY MAJOR ITEMS (i) Civil Works Civil works expenditure of K2.665,338 (2015: Kl,783,189) relates to costs of small local contractors engaged in the project to manage and supervise selected youths under the Youth Job Corps (YJC) component on waste and rubbish collections or cleaning and drainage cleaning during the year. (i) Consultancy Consultancy expenditure of K4,739,945 (2015:K4,483,682) relates to costs of consultants hired to set up. operate. manage the project and specialists engaged to carry out feasibility studies and consultancy services in the project. (iii) Stipends Stipend payments of K4, (2015:K3,735,281) relates to payment of stipends to youths enagaged under the Youth Job Corps (YJC) component on waste and rubbish collectionsicleaning and drainage cleaning including youths engaged under the Basic Life Skills Training (BLST) program during the year. It also includes youths engaged under Pre-employment Training (PET I and PET 2) programs and On the Job Training (OJT) programs covered in component 2. (iv) Goods The goods costs of K 1,330,455 (2015: K506,463) relates to purchases of computers and other assets for use of the project during the year which are classified as goods under the World Bank system. (v) Operating Costs Operating costs of K (2015:K795,455) are costs relating to services, supplies and materials used by the project during the year. (vi) Training Training expenses of K (2015: K527,238) relates to Trainers fees, training materials, hire of training venues and other related training expenses. (vii) GST reimbursement The Project has been paying GST to suppliers for goods and services where applicable though it is exempted per the Financing Agreement. The GST Returns for the years ended 31t December 2012 ifor Ki 06,360) (for K27i,629), 2014 (for K300,620), 2015 (for K262,609) and 2016 (for K ) have been lodged with Internal Revenue Commission. The GsT refunds for 2012 and 2013 were received in February It is anticipated that the GST paid for 2014,2015 and 2016 will be reimbursed by the Intemal Revenue Conmnision in due course. Page 8 of 10

11 FINANCIAL STATEMENTS FOR URBAN YOUTH EMPLOMENT PROJECT DETAILED STATEMENT OF RECEIPTS AND EXPENDITURE RECEIPTS K K IDA Special Investment Loan 1.219,890 11,430,889 World Bank -MDTF Grant (form Australian Gov't) 13, GoPNG Contribution 3, Korean Trust Funds Grants. TOTAL RECEIPTS ,469 11,430,889 LESS: EXPENDITURE Component 1 - Youth Job Corps Civil Works 2, ,189 Consultancy Stipends 1, ,801,571 Training 488, Goods ,193 Total Costs Component I 6.548,359 4,883,656 Component 2 - Skills Development and Employment Scheme Consultancy 1.136,524 1,326,864 Stipends 2.961,719 1,933,710 Training 36,731 13,601 Total Costs Component ,974 3,274,175 Component 3 - Proiect Management Consultancy 3,188,368 2,740,693 Training 126,938 17,059 Goods 346, ,270 Operating Costs 786, Total Costs Component ,673,477 TOTAL EXPENSES (components 1, 2,3) 15,131,169 11,831,308 NET SURPLUS/(DEFICIT) 2, (400,419) Page 9 of 10

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For personal use only Mayban Property (PNG) Limited Financial Statements Mayban Property (PNG) Limited Financial statements for the year ended 31 December 2014 Company information Mayban Property (PNG) Limited is a registered