FEDERAL MINISTRIY OF WATER RESOURCES, ABUJA NATIONAL URBAN WATER SECTOR REFORM PROJECT (NUWSRP III) IDA CREDIT NO 51460

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1 FEDERAL MINISTRIY OF WATER RESOURCES, ABUJA NATIONAL URBAN WATER SECTOR REFORM PROJECT (NUWSRP III) IDA CREDIT NO Public Disclosure Authorized FINANCIAL STATEMENTS AND MANAGEMENT LETTER FOR THE YEAR ENDED 3 1ST DECEMBER, 2016 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Tajudeen Badejo & Co. (CharteredAccountants) B36, 2 nd Floor, Nkwegu Plaza, Plot No Durumi District, Area 1, By Old Secretariat, Garki, Abuja (0) , (0) tadeenbadeioäahocom www tajudeenbadejoandco.com

2 CONTENTS PAGES 1. Corporate information 2. Auditors' report 3. Accounting policies 4. Balance sheet 5. Statement of fund receipt and utilization 6. Statement of cash flow 7. Notes to the accounts 8. Appendix 9. Management letter

3 3RDNATIONAL URBAN WATER SECTOR REFORM PROJECT {NUWSRP III} IDA CREDIT NO FINANCIAL STATEMENTS YEAR ENDED 3 1 st DECEMBER, 2016 CORPORATE INFORMATION REGISTERED OFFICE: Federal Ministry of Water Resources, Old Federal Secretariat, AbujaNigeria. PARTICIPATING AGENCIES Federal Ministry of Water Resources (FMWR) Supervising Ministry and National Coordinator FederalMinistry of Finance (FMF) Acting on behalf of Federal Government of Nigeria Project Management Office No. 15 Ajesa Street, Wuse II, Abuja, FCT. Tel: +234 (0) (0) Fax: +234 (0) Bankers: Access, Abuja. Auditors The auditors, MessrsTajudeenBadejo& Co {Chartered Accountants} have been expressed their interest to continue in office as the external auditors to the project. 2

4 7AT'UDET'RADE JO & CO Tajudeen Badejo & Co (Chartered Accountants) B36, 2nd Floor, Nkwegu Plaza, Plot No. 1078, Durumi District, Area 1, By Old Secretariat, Garki Abuja. Tel: REPORT OF THE INDEPENDENT AUDITORS TO THE MANAGEMENT OF WORLD BANK ASSISTED 3 RD NATIONAL URBAN WATER SECTOR REFORM PROJECT {IDA CREDIT 54160} FOR THE YEAR ENDED 3 1 ST DECEMBER, 2016 We have audited the accompanying project financial statements of the 3 rd National Urban Water Sector Reform Project (NUWSRP III) for the year ended 3 1s December, 2016 as set out on pages 6 to 15 and prepared on the basis of the accounting policies on page 5. The project is financed by the World Bank IDA Credit No Respective responsibilities of the Project Management and Auditors The Management of the World Bank assisted 3 rd National Urban Water Sector Reform Project (NUWSRP III) is responsible for the preparation of the project financial statements. It is our responsibility to form an independent opinion, based on our audit, on those statements and report our opinion to you. Basis of opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and World Bank guideline requirements. Those ISAs require that we plan and perform the audit to obtain reasonable assurance about whether the project financial statements are free from material misstatements. An audit includes examination, on a test basis, of evidence supporting the amounts and disclosures in the project financial statements. It also includes an assessment of any significant estimates and judgments made by the Management in the preparation of the project financial statements and of whether the accounting policies are appropriate to the project's circumstances, consistently applied and adequately disclosed as well as evaluating the overall project financial statements presentation. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the project financial statements are free from material misstatements, whether caused by fraud, error or other irregularity. In forming our opinion, we also evaluated overall adequacy of the presentations of the information in the project financial statements, and assessed whether the Project's books of account had been properly kept. Audit. Ton. Consulting. flnaolal Adviory.

5 Opinion In our opinion, the World Bank assisted 3 rd National Urban Water Sector Reform Project (NUWSRP III) books have been properly kept and the project financial statements which are in agreement with the books of accounts, give a true and fair view of the state of affairs of the Project as at 31 December Statement of Expenditure (SOE) The SOE are in agreement with the books of account and adequate documentations have been maintained to support claims to the World Bank for reimbursements of expenditures that are eligible for financing under the credit agreement. FGN Counterpart fund The Federal Government of Nigeria (FGN) provided counterpart fund during the reporting period ended 31 December, 2016 and have been properly used for the purposes of the project and all payments from this account are properly backed up by relevant supporting documents and are all properly recorded in the project books of account Statement of Special Accounts (SA) FSA3 contained on pages 11 to 15 have been prepared on the basis of cash deposits and withdrawals for the purpose of complying with the credit agreement and gives a true and fair view of the beginning and ending balances and account activity for the year ended 3 1 st December, Badejo Tajihdeen R /2f?3/I'CN/ Engagement part er For: Tajudeen4adejo & Co (Chartered Accountants) Abuja. Audit. Ton. Consulting. Wrtenoial Advisory.

6 3 RDNATIONAL URBAN WATER SECTOR REFORM PROJECT {NUWSRP III) IDA CREDIT NO FINANCIAL STATEMENTS YEAR ENDED 31ST DECEMBER, 2016 ACCOUNTING POLICIES Basis of accounts The accounts have been prepared under the cash accounting basis. No adjustments have been made to reflect the impact on the accounts of specific price change(s) in the general level of prices. Exchange rate Transactions in foreign currency are translated to naira at the autonomous rate of exchange ruling on the dates which the transactions occurred. Balances on special accounts are translated to naira at the autonomous rate exchange ruling at the balance sheet date ($ 1= N 304). Fixed assets Fixed assets are stated at cost, no depreciation was made by the project management on the assets. 5

7 BALANCE SHEET AS AT 31ST DECEMBER, 2016 Fixed assets and related expenses Fixed assets Project related expenses Accumulated Accumulated Note N N 1 161,006, ,228,178 Current assets Transfer to other project 3 348,617,895 Bank and cash 4 576,691, ,573, ,691, ,191,718 Current liabilities Net current assets Net assets 576,691, ,191,718 1,015,926, ,191,718 Funds World bank loan Other income Exchange reserve accounts 5 595,349, ,349, ,936, ,639, ,916 1,015,926, ,191,718 The financial statements on pages 2 to 15 were approved by the Management of the National Urban W ater Sector Reform Project o... and signed on its behalf by:.... National Project Coordinator Project A ccountant The Notes on pages 9 to 10 form part of these financial statements 6

8 STATEMENT OF CASHFLOW FOR THE PERIOD ENDED 31ST DECEMBER, 2016 For the year For the year 2016 Receipt 2015 Note N Received from World N Bank 5 595,349,802 Refund from IDA project ,617,895 Other income 6 116,936,831 Net cashflow from operating activities 465,554, ,349,802 Utilization Transfer to IDA Project ,617,895 Exchange gain 7 (302,797,561) Project related (841,916) expenses 2 278,228,178 Purchase of fixed assets 1 161,006,466 Net cashflow from investing activities 136,437, ,775,979 Cash and cash equivalent at 31 December, ,117, ,573,823 7

9 STATEMENT OF CASHFLOW FOR THE PERIOD ENDED 31ST DECEMBER, 2016 For the year For the year 2016 Fund received in 2015 the year Note N Received from World Bank N 595,349,802 Refund from IDA project ,617,895 Other income 116,936,831 Payments to suppliers and service providers (278,228,178) Payment to other project _ (348,617,895) Net cashflow from operating activities 8 187,326, ,731,907 Investing activities Purchase of fixed assets (161,006,466) Net cashflow from investing activities (161,006,466) Financing activities Exchange gain 302,797,561 Net cashflow from 841,916 financing activities 302,797, ,916 Cash and cash equivalent for year ,117, ,573,823 Cash and cash equivalent at I January, ,573,823 Cash and cash equivalent at 31 December, ,691, ,573,823 8

10 . WORLD BANK CREDIT NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST DECEMBER, Fixed assets At 1st January, 2016 Property, plant Motor Office Furniture and equipment vehicles Computer & and fittings Total equipment N N N N N Addition in the year 156,440,100 2,695,791 1,870, ,006,466 Accumulated at 31 December 156,440,100 2,695,791 1,870, ,006,466 9

11 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST DECEMBER, 2016 For the year Accumulated Accumulated Project related 2015 expenses N N Expert technical N assistance 67,158,990 67,158,990 Training and workshop 36,399,977 36,399,977 PIU running costs 174,436, ,436,292 Bank charges 232, , ,228, ,228,178 3 Advance to other project Transfer to IDA project Refund from IDA project (348,617,895) 348,617,895 (348,617,895) 348,617,895 (348,617,895) 348,617,895 4 Cash at bank FSA special account 3 Heritage (247,573,823) 247,573,823 FSA special account 3 Access, UK 532,022, ,022,046. CBN Counterpart fund account 44,615,416 44,615,416 FSA special account 3 Heritage Bank transfer to TSA 54,004 54, ,117, ,691, ,573,823 5 World bank loan World bank loan 595,349, ,349, ,349, ,349,802 6 Other income FGN Counterpart fund 110,531, ,531,260 Excess transfer from IDA Credit ,405,571 6,405, ,936, ,936,831 7 Exchange reserve accounts Exchange gain/(loss) for the year 302,797, ,639, ,916 Balance at 31 December 302,797, ,639, ,916 Net casflow from operating activities 8 Fund inflow in the year Fund outflow for operating activities in 465,554, ,349,802 the year (278,228,178) (348,617,895) Surplus before working capital changes 187,326, ,731,907 10

12 BANK RECONCILIATION STATEMENT SPECIAL ACCOUNT APPENDIX TO THE FINANCIAL STATEMENTS Bank Account number ACCESS HERITAGE Balance as per bank statement at 31 December 1,980, ,249, Less unpresented payments (231,751.53) (1,005,131.86) Balance as per cash book at 31 December 1,748, ,244,

13 HERITAGE BANK PLC RECONCILIATION STATEMENT HERITAGE BANK PLC & CBN RECONCILIATION STATEMENT ZERO (DRAWDOWN) ACCOUNT APPENDIX TO THE FINANCIAL STATEMENTS N N Balance as per Bank Statement Heritage Bank Plc ( ) at 31 December 13, Balance as per Bank Statement Central Bank of Nigeria ( ) at 31 December 44, Total 58, ,944, Reconciling items Add uncredited amount 73,111, Disbursable expenses (unpresented payments) (70,510,402.93) (11,944,175.34) 2,600, (11,944,175.34) Balance as per cash book at 31 December 2,659,

14 CBN COUNTERPART FUND DRAWDOWN ACCOUNT CBN COUNTERPART FUND RECONCILIATION STATEMENT ZERO ACCOUNT NO APPENDIX TO THE FINANCIAL STATEMENTS 2016 N Balance as per Bank Statement Central Bank of Nigeria at 31 December 71,604, Reconciling items Add Bank charges Less unpresented payments 21, (27,010,678.21) (26,989,572.81) Balance as per cash book at 31 December 44,615,

15 CUMMULATIVE NAIRA TRIAL BALANCE APPENDIX TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST DECEMBER, 2016 For the year Accumulated Accumulated N N N Computer & office equipment 2,695,791 2,695,791 Office furniture & fittings 1,870,575 1,870,575 Motor vehicle 156,440, ,440,100 Expert technical assistance 67,158,990 67,158,990 Training and workshop 36,399,977 36,399,977 Printing and stationeries PIU 2,468,078 2,468,078 Infrastructure PIU 77,897,230 77,897,230 PIU running costs PIU 94,070,984 94,070,984 Bank charges 232, ,919 Transfer from other project IDA Credit No: (348,617,895) 348,617,895 FSA special account 3 Heritage Bank (247,573,823) 247,573,823 FSA special account 3 Access Bank UK 532,022, ,022,046 Transfer to Treasury Single Account (TSA) 54,004 54,004 FGN Counterpart fund contribution (110,531,260) (110,531,260) World bank advance FSA 3 (595,349,802) (595,349,802) CBN Counterpart fund account balance Excess 44,615,416 transfer trom 44,615,416 other project IDA Credit No: (6,405,571) (6,405,571) Exchange difference (302,797,561) (303,639,477) (841,916) 14

16 CUMMULATIVE DOLLAR TRIAL BALANCE APPENDIX TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST DECEMBER, 2016 For the year Accumulated Accumulated $ $ Computer & office equipment 8,587 8,587 Office furniture & fittings 5,533 5,533 Motor vehicle 452, ,284 Expert technical assistance 215, ,926 Training and workshop 120, ,958 Printing and stationeries 7,301 7, , ,493 PIU running costs 229, ,968 Bank charges 1,075 1,075 1,748,634 Transfer to Treasury Single Account (TSA) Refund from other project IDA Credit No: (1,755,502) 1,755,502 Excess transfer from IDA Credit No: (21,036) (21,036) FSA special account 3 Heritage Bank (1,244,497) 1,244,497 World bank credit FSA 3 (2,999,999) (2,999,999) 15

FOR THE PERIOD ENDED 3 1 ST DECEMBER, 2016

THlE WORLD BANK 111 YOUTH EMPLOYMENT AND SOCIAL SUPPORT OPERATION (YESSO) (FEDERAL MINISTRY OF FINANCE) FINANCIAL STA TEMENTS FOR THE PERIOD ENDED 3 1 ST DECEMBER, 2016 AUDITED BY Public Disclosure Authorized